Economy, Business And Markets

Nuclear Deal Spurs Gold Rush in Iran

Nuclear Deal Spurs Gold Rush in IranNuclear Deal Spurs Gold Rush in Iran

Iranian demand for gold jewelry surged to a near two-year high in the third quarter, as sentiment improved following Tehran’s signing of a nuclear deal with world powers in July, wrote Abu Dhabi-based English-language daily The National.

The surge in Iranian demand for the precious metal came amid falling demand in other parts of the Middle East as oil prices slumped.

Global demand for gold in the third quarter rose 8% year-on-year to 1,120.9 tons, its highest level in two years, according to figures released on Thursday by the World Gold Council.

Consumer demand for gold grew following a price dip prompted by exchange-traded fund outflows in July, with prices rebounding as institutional investors resumed purchases.

Bullion for immediate delivery edged up 0.1% to $1,087.40 an ounce in Singapore last week, according to Bloomberg, just above the $1,077.40 an ounce level on July 24, the lowest since 2010.

Demand for gold jewelry in Iran jumped 40% to 12.8 tons in the three months to the end of September, making it one of the fastest-growing jewelry markets in the world, according to the council.

“Consumer sentiment was boosted by the signing of the nuclear deal, an effect that was further magnified by the tumbling gold price,” the council noted, despite the introduction of a 9% value-added tax in Iran in late March.

Gold jewelry demand across the Middle East grew 8% year-on-year to 55.5 tons, even as demand fell sharply in some parts of the region after lower oil prices.

Demand in Kuwait fell 15% year-on-year to 2.2 tons in the third quarter. UAE demand dropped 5% to 9.9 tons in the quarter.

However, the UAE’s Central Bank confirmed that it added 5 tons of gold to its reserves between April and September, placing the UAE among the top 100 holders of gold worldwide.

Gold purchases by central banks rose to 175 tons during the quarter, just shy of the record level of 179.5 tons in the third quarter last year.