The gold market has gone into a coma, according to Mohammad Keshti-Aray, head of Tehran’s Gold and Jewelry Union.
“Gold prices will not remain volatile till next month,” the gold market expert told Fars News Agency on Tuesday.
“Gold coin prices had a downtrend in the first three months of this year (started March 21),” said Keshti-Aray. “This was in contrast to what we saw near last year’s end.”
The dollar’s moribund trading and slight weakening in the past month added to the pressure on the precious metal. A weaker dollar makes dollar-denominated gold cheaper for buyers in other currencies.
Benchmark Azadi bullion coin has fallen from 9,600,000 rials down to 9,000,000 rials during the first quarter of the fiscal year.
Gold prices in the international market have fluctuated in a tight range in the past quarter. Bullion for immediate delivery has seen a low of $1162.24 per ounce, and a high of $1232.31 since the end of May.
The tight trading range in the international markets is one of the reasons behind Azadi coin’s lackluster trading in Iran.
“The world hasn’t seen any large economic changes, and as a result, volatility has been normal,” said Keshti-Aray.
Also, Iran’s gold market has seen a recession during the past quarter, mainly because of the uncertain outcome of the nuclear talks between Iran and P5+1–Britain, France, Germany, United States, China and Russia.
Iran and the six world powers are on the last leg of their negotiations that could see the lifting of sanctions against Tehran in exchange for ensuring that its nuclear program remains exclusively peaceful.
The six powers have a June 30 deadline but diplomats close to the talks expect that to slip, according to Reuters.
The union chief said the central bank’s policies in stabilizing the foreign exchange market were effective.
“During this period, there have been no fluctuations in the foreign exchange market and aggregate price movements in the currency market and the gold market followed a constant and definite trend, and no major change happened in these markets,” he explained.
“The gold market usually witnesses increased activity in summer, but for now we must wait for the end of the nuclear talks,” said Keshti-Aray. “The foreign exchange market is waiting for the outcome and the gold market naturally follows the foreign exchange market.
