The Israeli siege imposed on the Gaza Strip has variously affected the territory's economic, business and financial sectors. Now, it is the gold market's turn. Nazmi Muhanna, general director of the Palestinian Crossing and Borders Authority, announced March 29 that Israeli officials had informed him that they were halting the movement of gold, in all forms, into and out of Gaza. 

In February, Israel agreed to allowing 12 gold dealers and manufacturers to import and export gold to and from the Gaza Strip. Muhanna estimated the trade volume at 48 kilograms (106 pounds) per week between mid-February and late March. There are 40 gold factories in Gaza, a fairly large number for an area of only 365 square kilometers (141 square miles). Locally manufactured gold is estimated to account for about 70% of gold purchases, given that its price is fairly stable and it can often be sold without incurring major losses compared to other types of imported gold. 

There has been no official explanation for the ban, but Hatem Oweida, undersecretary of the Ministry of National Economy, told Al-Monitor that Israel issued the decision with the goal of “tightening the noose” on Palestinians in the Gaza Strip. Oweida said, “This is despite the fact that the gold trade does not entail any security risk for Israel, which is capable of controlling the goods entering and leaving Gaza, and knowing that the gold market in Gaza is already ailing. Figures show that the first quarter of 2016 witnessed instability and decline as far as gold is concerned. In January, 169 kilograms of gold were stamped, 176 kilograms in February and only 143 kilograms in March, which points to weak purchasing power in the Gaza Strip as a result of the poor economic situation.”

Al-Monitor toured the gold market in central Gaza April 16 to speak with traders about the Israeli decision. One trader, Jihad Rafeh, said, “The seriousness of Israel's decision is in its timing, as its issuance coincided with the summer season, which is usually full of social events that require Palestinian women to buy gold accessories. Consequently, the gold market will suffer from further recession, knowing that it has already been spiraling downward since the start of the Israeli siege of Gaza in 2006. The first result of the decision was a drop in the price of gold from 25 to 23 Jordanian dinars [$35 to $32] per gram.”