The Emami gold coin extended gains on Wednesday to strengthen above 140 million-rial level for the day, after briefly touching the critical level a session earlier. The coin rose 3.12% to be traded at 144 million rials, indicating 4.5 million rials growth in one day.
Bahar Azadi gold coin was priced at 136 million rials, up 3 million rials compared with Tuesday’s close. Likewise, one gram of 18-karat gold gained 2.4% to reach 13.11million rials, according to eghtesadnews.
Rising demand plus spike in forex rates are seen as the driving forces behind the unprecedented gold rally in the country that has taken prices to historic highs.
Emerging from a flat day a session earlier, major currencies resumed the rally on Wednesday with the dollar drawing very close to the psychological 300,000 rials.
The greenback added to past gains against the national currency to reach 296,000 rials – up more than 1% compared to the previous day’s close. One euro bought 344,740 rials, up slightly by 0.25% daily. The currency has gained 1.8% compared to rates quoted on Monday.
The UK pound sterling was tagged at 383,000 rials and one UAE dirham 80,950 rials.
One dollar was worth 287,540 rials at exchange shops affiliated to the Central Bank of Iran, indicating 2,470 rials growth compared to the earlier session.
As seen in most recent sessions, gold gains outpaced forex growth, despite the fact that the latter is usually the main driver of gold prices in Iran.
Market experts ascribe the higher gold prices to investors’ desire to invest in the yellow metal. According to Ebrahim Mohammadvali, head of Tehran Gold and Jewelry Union, “unprecedented increase in demand” is the main reason behind the soaring gold prices.
“Capital is flowing from other markets into the bullion market” he was quoted as saying.
He referred to investors’ disappointment with the lethargic performance of the bourse in the past two months. The market expert said due to high demand the gold coin is now traded 14 million rials above its real value.
Gold fell on Wednesday in world market and was on track for its biggest monthly decline in nearly four years, as the dollar benefited from caution that crept into financial markets after the first US presidential debate, Reuters reported.
Spot gold fell 0.7% to $1,883.62 per ounce by 0944 GMT, declining 4.3% so far in September, setting it up for its worst monthly performance since November 2016. The US gold futures were down 0.8% at $1,888.10 per ounce.