Stalled Nuclear Talks Push Up Forex, Gold to 14-Month High
EghtesadOnline: The currency market in Tehran was highly volatile on Saturday, apparently riven by negative political developments that sent forex and gold prices to the highest in past 14 months.
The dollar crossed above the psychological 300,000-rials in the open market, jumping 8,600 rials or 2.85% in one day to settle at 301,600 rials, according to the Persian-language economic website Eqtesad News.
The biggest gainer was the UAE dirham. It jumped 4.1% or 3,400 rials to close at 83,100 rials while the euro was up more than 2.6% to buy 341,440 rials. The UK pound sterling gained more than 2% to change hands at 398,860 rials.
Concern among market investors about the fate of the protracted talks to restore Iran’s 2015 nuclear agreement, officially known as the Joint Comprehensive Plan of Action (JCPOA), has given the rial a drubbing unseen in the recent past.
The seventh round of talks to revive the JCPOA started on November 29 in Vienna and were suspended temporarily on Friday. It has been reported that the negotiators from the six countries Iran, China, Russia, France, Germany and the UK, will meet again next week.
Official exchange shops affiliated to the Central Bank of Iran pushed up prices to keep abreast with open market trends.
Melli Exchange of Bank Melli Iran tagged the greenback at 279,720 rials -- almost 2.4% or 6,530 rials higher than Thursday. In the regulated forex market, where currencies are traded wholesale, the greenback rose 2.85% to 276,990.
The regulated market is a CBI-affiliated spot market operated by a network of banks and certified moneychangers dealing in wholesale currency.
The domestic bullion market was bullish thanks to both the spike in currency prices and rising trends in international markets.
Emami gold coin gained more than 3% or 4 million rials to change hands at 130.25 million rials. Half Bahar Azadi coin closed 2.57% higher to reach 68 million rials and one gram of 18-karat gold was worth 13 million rials, up 3.3% on the previous session, the Tehran Gold and Jewelry Union reported.
Gold prices rose nearly 1% in international markets on Friday as uncertainty sparked by the Omicron coronavirus variant and a dip in US Treasury yields boosted the safe-haven metal's appeal, Reuters reported.
Spot gold was up 0.9% at $1,785.29 per ounce and US gold futures settled 1.2% higher at $1,783.90.