He added that the sale of gold to merchants stemmed from the increased inflation and the drop in the Syrian consumers' purchasing power.
According to Sarji, this phenomenon centralizes the entire gold trade in the hands of a small group of merchants. He added that this was leading to an increase in the smuggling of gold to Lebanon.
At the beginning of November, he said, about 1 ton of gold was smuggled from Syria to Lebanon a day, although the trend was curbed as the Muslim holiday of Eid al-Adha approached.
Sarji criticized the government, stressing that the heavy tax on gold imports – about $1,500 per kilogram of imported gold – also contribute to the increased smuggling. In addition, the Syrian government bans local factories from exporting their products, damaging their income and encouraging smuggling to the neighboring country of Lebanon, he said.
In an interview with the governmental al-Baath newspaper, Sarji stated that the Syrian gold market had recorded a 70-90% drop in demands, compared to the same period last year.
According to the Goldsmiths Association's data, the number of factories and workshops in the Syrian gold industry has been decreasing steadily, totaling 200 today compared to about 600 at the end of the year 2000.
Sarji estimated that the price of gold would continue to rise in the global market in light of increased demands on the part of countries like China and India, and would reach $1,200 per ounce by the end of the year. He predicted that the price of a gram of gold in the Syrian market would reach about $40 if the dollar rate continued to weaken.
Doron Peskin is head of research at Info-Prod Research (Middle East) Ltd.