EghtesadOnline: After 10 auctions were held by Bank Melli Iran’s Bank Kargoshaee for deflating the bubble in gold coin prices, demand for the precious metal seems to be cooling.
In order to contain the recent rise in gold coin prices and their unprecedented rally, the Central Bank of Iran held auctions on Nov. 25 to dampen the gold fervor. The price of Bahar Azadi gold coin had surged to 14.5 million rials ($347) on Nov. 21 to mark the benchmark gold coin’s highest value in six years.
Gold coin prices—which had at first refused to come down and continued to register rises—have shown a declining trajectory in the past week.
“As the queue to purchase coins dwindled and the auction hall became less crowded, our prediction is that the decline in gold coins’ prices in the market will continue,” Masoud Soleimani, the head of Bank Kargoshaee, told IBENA on Monday.
According to Financial Tribune, the official points out that an auction was held on Saturday while the next one is to be held on Wednesday. As previously announced, the auctions will continue until the gold coin bubble is sufficiently dealt with.
According to Soleimani, the Central Bank of Iran set the base price of each Bahar Azadi gold coin at 11.68 million rials on Saturday ($279), which was sold at 12.73 million rials ($3.4) after levying a 9% value-added tax.
The base price of the Half Azadi coin was also set at 5.48 million rials ($131) by the policymaker, meaning that it was traded at around 6.36 million rials ($152) in the auction after VAT.
“The bubble in Bahar Azadi coin is currently around 950,000 rials ($23) [from the previous 2 million rials ($48)],” said Soleimani, adding that the real rate of the coin stands at around 12.90 million rials ($309).
The benchmark gold coin was traded for 13.93 million rials ($333) on Monday, according to the Tehran Gold and Jewelry Union’s website.
Soleimani said a total of about 39,000 Bahar Azadi and Half Azadi coins were sold during the past nine auctions.