Iran’s Gold Industry Faces 30% Production Drop

TEHRAN (Iran News) Bazrafshan highlighted the multiple challenges facing Iran’s gold and jewelry industry in the current year. “The gradual increase in gold prices, both globally and domestically, coupled with inflationary pressures, has weakened people’s purchasing power and led to stagnation in the market,” he said. This economic strain has caused a significant reduction in production, with manufacturing and distribution units facing rising operational costs, including rent, labor, and other expenses.

Bazrafshan noted that gold, as a precious metal, is often one of the last items in a household’s budget, purchased only when savings allow. “Unfortunately, the unexpected price hikes and inflation have made it difficult for people to invest in gold, resulting in a tough year for the industry,” he added.

The union president described the situation as an “unprecedented crisis,” pointing out a 20 to 30 percent drop in production among manufacturing units. Even traditionally busy occasions, such as the birthday of Hazrat Fatemeh Zahra (celebrated as Women’s Day in Iran), failed to boost demand this year. “Unlike previous years, when we saw a slight uptick in demand, this year there was no change in business activity or market interest,” Bazrafshan lamented.

With the year-end approaching, he expressed hope that economic conditions and price fluctuations might improve to ease the burden on industry workers. However, he acknowledged that the overlap of the upcoming New Year with the holy month of Ramadan could further complicate recovery efforts.

Bazrafshan urged lawmakers and government officials to adopt a more specialized approach toward trade associations, arguing that their input is often overlooked in policymaking. “There are numerous restrictive laws affecting various industries, yet no specialized consultations are held with trade representatives before implementation,” he said. He emphasized that Iran’s 3.2 million trade association members represent a vital economic force that could drive growth and address national challenges if properly supported.

He also criticized the lack of export focus, noting that while Iran’s gold industry has advanced significantly over the past decade, its export figures remain negligible compared to regional competitors like Turkey. “Turkey has made remarkable progress in production and exported 700 tons of gold products globally from 2022 to 2024, while we managed only 875 kilograms—an amount that’s effectively zero in comparison,” Bazrafshan stated.

Bazrafshan pointed to untapped resources, such as semi-precious gemstones in South Khorasan, which could bolster the economy if extracted and exported. He also highlighted Iran’s capability to export machinery to European countries, underscoring the industry’s potential. “With a 7,000-year history and such capacity, this sector should not be viewed merely as a luxury market,” he argued. “It could play a pivotal role in generating foreign currency and creating jobs.”

Expressing frustration with policymakers, Bazrafshan called for a shift in perspective. “In meetings, officials treat gold as a luxury item, but this industry has the power to transform key economic sectors if given the attention it deserves,” he concluded.

As Iran’s gold industry grapples with declining production and stagnant demand, Bazrafshan remains hopeful that the blessings of Ramadan and a new year might bring relief and revitalization to this historic trade.