Iraq’s Gold Market Vulnerable to Increasing Gold Scams

Shafaq News/ Victims of gold scams in Iraq are lamenting substantial financial losses as the proliferation of fake gold surges across the country, exacerbating economic woes driven by a weakened Iraqi dinar, soaring inflation, and escalating prices.

Fake gold, often containing high copper content that complicates detection, has emerged as a pervasive issue affecting both consumers and goldsmiths, who struggle to identify manipulated gold, particularly with 21-carat pieces.

Testimonies gathered by Shafaq News underscore the escalating prevalence of gold scams within Iraq’s market, with reports implicating even established gold merchants.

Online Deception

“I recently encountered an advertisement on a social media platform offering a 21-carat gold earring for 65,000 dinars (about 50$),” recounted one victim, who requested anonymity. “Upon receiving it, doubts arose about its authenticity. Subsequent verification by a goldsmith confirmed it was Brazilian gold (consists of about 3% of 18k gold over a base metal.) Attempts to contact the seller proved futile as the page had been deleted.”

She added, “Buyers are often enticed by competitive pricing, attractive offers, and convenient delivery services, leading many unsuspecting citizens to fall victim to these fraudulent schemes.”

Market Dynamics and Consumer Caution

Responding to consumer concerns, a Baghdad-based goldsmith emphasized, “There exists no discounted price for genuine gold. Current market rates for a mithqal of gold (about 5 grams) stand at 480,000 dinars (about 377$). Any deviation, such as prices lower than market norms, should raise suspicion.”

He pointed out, “Instances have been noted where purported 21-carat gold is found upon inspection to be of inferior quality, with carat levels reduced to 20. Such discrepancies are challenging for consumers to discern, perpetuating fraud.”

Challenges Outside Formal Channels

Another victim shared their experience, “I purchased 21-carat gold jewelry from a colleague at work, only to discover years later that pieces were either 18 carats or merely gold-plated. My colleague left the workplace shortly after that.”

Amid mounting concerns over consumer vulnerability, Abdul Zahra Al-Hindawi, spokesperson for Iraq’s Ministry of Planning, affirmed ongoing vigilance by the Central Organization for Standardization and Quality Control.

Regulatory Vigilance and Enforcement

Al-Hindawi detailed, “Our regulatory efforts encompass continuous monitoring of goldsmiths through field teams, ensuring compliance with standards and practices. Violations, including the sale of unmarked or counterfeit gold, prompt legal actions ranging from shop closures to confiscation of illicit goods and revocation of operating licenses.”

He added, “Stringent measures are calibrated to address varying levels of infractions, complemented by educational initiatives and compliance advisories aimed at rectifying unintentional oversights.”

Import Controls and Enhanced Monitoring

Regarding imported gold, Al-Hindawi highlighted, “Imported gold undergoes rigorous scrutiny at designated centers within Baghdad, Basra, Kirkuk, and Najaf airports. Equipped with advanced testing equipment and skilled personnel, these facilities ensure adherence to safety protocols and issuance of conformity certificates.”

Al-Hindawi affirmed, “This initiative seeks to streamline procedures for goldsmiths, promoting transparency and efficiency in testing processes at airport hubs and bolstering consumer confidence amidst prevailing challenges.”