TEHRAN, Iran, Dec.19
Trend:
Iranian government can revive the production by injecting the home-kept golds to the economic cycle of the country, head of Iranian Union of Manufacturers and Exporters of Gold, Jewelry, Silver and Precious Stones said.
“As a rule, closing balance at the end of the year leads to change in old prices and increase in demands," Abdollah Mohammad Vali told Trend referring to the latest status of gold and coin market in Iran.
“Political issues and sanctions have also caused price fluctuations more than ever before,” Mohammad Vali said. “Although some market participants believe the gold market will be controlled by the end of the Iranian year [March 21, 2020], but the political and economic conditions determine the market status.”
"In general, the prospect of gold prices is on the rise, as the gold mining in the world is declining and governments seeking to store it," said the head of the union.
Mohammad Vali went on to say that the global price of gold will increase.
“Domestic gold prices tend to correlate with developments in international market,” said Mohammad Vali adding that the price of gold per ounce today is $1478, which seems could rise to $1550 or even $1600 in the current situation.
"Given the current economic situation, if the central bank will be able to supply a significant volume of gold currently stored at households into the economic cycle, there will be hope for manufacturing revival in the country. Of course, this requires mechanisms to gain trust of people and provide needed facilities,” Mohammad Vali said, referring to the decline in production in the country and the high volume of home-kept gold.
He noted that the accumulation of gold in the homes of the people is not low.
“Government policy can put this gold into production,” Mohammad Vali added.
Iranians have stocked up on gold coins and other safe haven investments as the local rial currency has plummeted in the wake of Trump’s withdrawal from the 2015 nuclear deal between Iran and world powers in May 2018. The Iranian rial has plunged to approximately 135,000 to the US dollar from last year’s rate of around 40,500.
Raising foreign currency deposit rates and other several incentives for investing in Stock Exchange instead of stocking up gold at homes are considered among the methods to guide liquidity to productive markets in Iran.