Gold coin prices dropped in Tehran market on Tuesday as the Central Bank of Iran launched the initial public offer for Bahar Azadi gold coin bonds at the Iran Mercantile Exchange (IME).
Bahar Azadi gold coin lost nearly 4% or 6 million rials on Tuesday and was quoted at 151.06 million rials. The benchmark coin jumped more than 8.2% last week, reaching an all-time high of 157.09 million rails on Monday, Eghtesadnews website reported.
The Emami gold coin was tagged at 159.67 million rials, down almost 3% on the day before. Half Bahar Azadi coin lost 1.13% or 1 million rials to buy 88.5 million rials while the Quarter Bahar Azadi coin was down 1.71% at 58.5 million rials.
Bullion prices slid mostly under the influence of the CBI's move to sell sovereign gold bonds (SGBs). The bonds are not taxable and every Iranian can buy up to 100 coins in bonds.
Maturity of the SGBs are six months. Bonds will be liquidated in cash at maturity date based on the average price of gold coin bonds and bank certificate of gold coin deposits on the last trading day. The CBI guarantees the bond repayment.
The CBI is selling 1 million Bahar Azadi gold coins in thef orm of 100 million SGBs. As per IME data, 100 bonds (one Bahar Azadi coin) were sold at 157.8 million rials.
The CBI said on Tuesday that owners of SGBs may demand the coins rather than liquidating bonds. It also has created the conditions for secondary trade of the bonds.
IME is a commodities exchange in Tehran founded in 2006 dealing in farm, industrial and petrochemical products in the spot and futures markets.
The exchange has been offering gold coin futures contracts for years. However, spot trading is still done traditionally in Iran in the black market through bureaux de change and independent traders.
Tehran's main bazaar in the south of the city and Ferdowsi Street in the center of the capital are the main hubs for currency and gold trade in Iran.
