Online gold platforms thrive in Iran as economic pressures mount

Online gold-selling platforms are gaining traction in Iran, offering fractional ownership of the precious metal as an accessible option for those grappling with financial instability.

The platforms, heavily advertised across Tehran, target lower-income individuals seeking to protect their dwindling savings amidst a falling currency that wipes out their cash savings.

With gold prices soaring to approximately 55 million rials per gram, many Iranians now find traditional methods of purchasing gold increasingly out of reach.

For decades, gold has served as a trusted form of savings and financial security, especially during economic crises. However, with the average worker earning just above 100 million rials per month ($130) and living costs rising sharply, purchasing even a small amount has become unattainable.

The platforms’ promise of affordability has drawn interest but also skepticism. Mizan News Agency, affiliated with the Judiciary, has warned that “fake sales and fraud are among the dangers lurking for gold buyers via online platforms.”

Public trust remains low, partly due to past scandals like the 2016 collapse of Samen Coins, a gold trading company that embezzled 150 trillion rials, devastating thousands of customers and deepening fears about the trustworthiness of online sales.

The company engaged in fake sales, selling assets it did not possess, leading to widespread financial losses. The scandal prompted public outrage and legal action, resulting in the arrest and prosecution of key figures. It also highlighted significant regulatory weaknesses in Iran's financial oversight, particularly of online trading platforms, and eroded public trust in such services.

The uncertainty about the platforms is further exacerbated by the relentless depreciation of the rial. Despite hopes that the dollar’s upward trend would stabilize following Donald Trump's comments of resolving Iran issue without military conflict, the US dollar has surged to approximately 850,000 rials, breaking new records. Economic expert Ali Sadeghin notes that while negotiations between Iran and the US remain uncertain, inflationary expectations continue to drive the dollar’s rise.

Sadeghin explained to Titre-Avval-e Eghtesad website, “If negative news is injected into the market, the dollar's price will move to a higher threshold. Overall, the dollar could rise above its current level.”

The broader impact of the economic crisis extends beyond finance. Sociology professor Zahra Ojagh observed that rising poverty and currency devaluation are eroding social trust and increasing conflict. “When a society becomes poorer, healthy interactions decline, leading to heightened mistrust and conflict,” she added.