EghtesadOnline: Traditionally influenced by domestic currency rates, Iran’s gold market has moved away and taken a different route since the past week amid soaring prices in global markets.
Despite the bearish trend in the forex market, the yellow metal behaved differently in Tehran on Tuesday, following in the footsteps of the international market.
Each Imami gold coin sold for 42.3 million rials, up 800,000 rials compared to the previous trading session on Sunday. Benchmark Bahar Azadi was sold for 41 million rials, inquiries by the Financial Tribune show.
According to a Reuters report, gold prices scaled their highest in more than six years on Tuesday in global markets, as concerns about protests in Hong Kong and an Argentine currency crash amid fears of global economic slowdown, prompted investors to move away from riskier assets, Financial Tribune reported.
Spot gold rose 0.7% to $1,521.98 per ounce, its highest since April 2013.
The gold market in Iran has surged at the same pace with foreign currency market since last spring when the market turned to the worst after the imposition of new US economic sanctions.
Gold has been in the same league with currency rates as it was mainly bearish following the forex decline since the beginning of the present fiscal year in March.
Bubbles contributed to a bigger portion of the nominal price of gold coins in the domestic market under the influence of the soaring forex market.
Surge in the price of the precious metal in global markets, however, has deflated the gold bubble in the domestic arena, causing the gold coin to move closer to real prices.
Benchmark Bahar Azadi gold coin bubble has currently reduced to less than 450,000 rials in the Tehran market.
The bubble was as high as 4 million rials barely six months ago.
The rial had plummeted more than 50% after US President Donald Trump abandoned the landmark 2015 Iran nuclear accord and imposed tough economic sanctions last year. It regained almost 23% of its value over the past months.
One dollar was worth 117,000 rials in Tehran on Tuesday. The euro was exchanged for 130,000 rials and the UK pound fetched 142,000 rials.