CBI Delivers Presold Gold Coins

EghtesadOnline: The Central Bank of Iran said on Saturday it has fulfilled its commitment of delivering the gold coins purchased by people during the presale scheme in the past few months.

News ID: ۷۴۵۸۰۷

06 August 2018

According to a statement published on CBI's official website, a total of about 7.6 million gold coins were offered to applicants in the presale scheme, of which about 1.61 million coins with maturity periods of one month and three months have been delivered to applicants.

One-month maturity presold coins amounted to 790,000 coins with about 820,000 coins having a three-month maturity.

"Only about 5% of purchasers have not so far referred to branches of the agent bank [Bank Melli] to receive their coins," Financial Tribune quoted the regulator as saying.

A total of about 2.58 million coins with a maturity period of six months will be eligible to receive the same at Bank Melli branches starting Aug. 8.

Ebrahim Mohammad Vali, the head of Tehran Gold and Jewelry Union, told IRNA on Saturday people and speculators have held off the purchase of gold to see the outcome of the government's announcement.

However, the official said, "New foreign exchange policies will only prove effective in curbing market fluctuations, if they are implemented well and the government acts on its commitments on time".

Mohammad Vali pointed out that even after the steep drop of the past few days, gold coin prices still have a bubble of about 8 million rials ($181).

A World Gold Council last week said Iran's gold bar and coin sales tripled to 15.2 tons in the second quarter of 2018, the highest in four years. It shot up to 15.2 tons–a 200% increase YOY–to reach its highest quarterly level since Q1 2014.

Coin demand was healthy, as the CBI increased the amount of gold coins offered in the market, it said.

As all eyes are on the government's imminent announcement of its new foreign exchange policies and the central bank says it has fulfilled its gold commitments, Iran's gold market has found some momentary respite.

According to the Tehran Gold and Jewelry Union, gold coins on Sunday continued to slid on the falling trajectory of the past few days, with each benchmark Emami coin changing hands for 36.3 million rials ($822), down by 3% compared to the day before and more than 20% compared to last week when prices hit an all-time high of 48 million rials ($1,088).

Recent gold coin price hikes in Iran materialized in the shadow of looming US sanctions. As Bloomberg reported on Saturday, gold’s appeal has waned amid ongoing trade-war tensions, as the metal has come near its lowest point in more than a year, edging closer to the key $1,200-an-ounce level.

The past few days' decline in gold prices in Iran is mainly due to the fact that everyone has been expecting the imminent announcement of the government's new foreign exchange policies that are expected to ease the chokehold over the market. The policies are further expected to expand the secondary foreign exchange market that operates on the basis of negotiated rates that are close to open market rates.