Gold Slips, Dollar Flat
EghtesadOnline: After rising a session earlier, the US dollar lost momentum on Monday and stayed unchanged apparently after political tensions impacting investor sentiments eased.
The greenback was worth 272,500 rials at Tehran’s open market, up 500 rials, or 0.1% compared to the previous session.
It climbed 7,000 rials to reach a record high of 273,000 rials on Sunday -- a 2% growth overnight.
With Iran’s second fiscal quarter (July 21- September 21) ending Monday, the dollar posted a 43% gain in six months outpacing the stock market, but still behind gold.
Despite a fall on Monday, the Emami gold coin was the top-performing asset in summer, gaining about 65% on the back of an upbeat mood in the domestic currency market and a bullish trend in world markets.
The coin, which hit a historic high of 132.6 million rials in the previous session, lost more than 1.6%, or 2.15 million rials on Monday to be priced at 130.66 million rials.
Bahar Azadi gold coin gained 2.1 million rials, or 1.7%, to reach 125.24 million rials. One gram of 18-carat gold dropped 1.85% and was quoted at 12.26 million rials, according to the Tehran Gold and Jewelry Union website.
Referring to the higher growth compared with forex rates, market analysts have warned about price bubbles in the gold market.
Forex rates, international gold prices and domestic demand are the three main drivers of the domestic bullion market. Analysts point to the increasing demand for the precious metal (as a safe haven) in recent months as the main reason behind the bubble.
Globally gold fell to its lowest in nearly two weeks on Monday as the dollar strengthened, while skepticism over additional stimulus measures from US Federal Reserve policymakers’ speeches this week added further pressure, according to Reuters.
Spot gold dropped 1% to $1,930.07 per ounce having declined to its lowest since Sept. 9 at $1,928.14. US gold futures fell 1.2% to $1,938.30 per ounce.