EghtesadOnline: Bahar Azadi Gold Coin dropped by 150,000 rials or 1.15% in Tehran's market on Tuesday and fetched 12.20 million rials ($325), highlighting the fact that the recent rally was a short-lived bubble inflated by speculators.
After a significant leap in recent days, the benchmark coin sold for 12.35 million rials ($330) on Monday, marking a 3.35% jump of 420,000 rials compared with Sunday's close to reach its highest price since September 2013.
Half Azadi Gold Coin also witnessed a 3% increase to surpass 7 million rials ($186) on Monday.
The rally, however, proved ephemeral since the bull run was not supported by global trends, as speculators pulled the strings behind the scene, Financial Tribune reported.
The price of gold coin in Iran's market is mainly influenced by the exchange rate of US dollar and global gold prices.
The recent surge, however, came despite rial's slight gain against the greenback in Iran's foreign exchange market while the global price of gold almost stayed unchanged around $1,205 an ounce to highlight the fact that the 3.35% increase in gold coin value was not linked to global trends.
Experts believe the bubble in the gold coin market emerged after speculators rushed to hoard gold coins. They had pitched the idea that the price of gold coin will climb during the final days of the current Iranian year, which ends on March 20. That notion appears to lack substance, as the onset of the Iranian New Year is only a few days away and if anyone needed to buy a gold coin, they would have purchased it by now.
According to Financial Tribune's sister newspaper, Donya-e-Eqtesad, gold coin markets are facing lackluster demand, further evidence that price rallies are rooted in speculative activities.
Earlier, the Central Bank of Iran had announced that they are monitoring the market and if necessary, they will balance the market by auctioning gold coins in cooperation with Bank Melli Iran.
Gold prices in international markets steadied on Tuesday, as expectations of an interest rate rise by the US Federal Reserve boosted the dollar, while political risks in Europe kept losses in check by boosting the metal's safe-haven appeal, CNBC reported.