Economy, Business And Markets

Gold Market Unstirred by Saudi Move

Gold Market Unstirred by Saudi MoveGold Market Unstirred by Saudi Move

The recent decision by the Saudi government to cut diplomatic and economic ties with Iran followed by similar moves by Bahrain and Sudan will not pose any major challenge to Iran’s vibrant gold market, Ebadollah Mohammadvali, head of Iran’s Association of Gold and Jewelry Manufacturers and Exporters, said on Tuesday.

Iranian gold producers can and are able to quickly find alternative export markets, like Afghanistan, he said.

The embattled House of Saud severed diplomatic ties with Iran on Sunday after a group of protesters stormed its embassy in Tehran in the wake of the execution of prominent Shia cleric Sheik Nimr al-Nimr. On Monday the Saudis also announced that they are cutting all trade relations with Iran.

Mohammadvali stated that Iran’s gold trade is more focused on the former Soviet states and the Middle East. Iran has the upper hand when it comes to gold trade with Saudi Arabia and Bahrain.

“Some minor fluctuations could emerge in Iran’s gold export due to the recent developments, but there is no reason to worry,” he said.

The bulk of Iran’s gold export goes to neighboring Iraq and Turkey according to the official. Ukraine, Hong Kong and Thailand are also among targets for Iran’s gold export, he said, adding that exports to these countries have been on the decline due to “the lingering recession in the country in recent years.”

The official noted that almost 80% of the gold produced in the country is exported but that the price of the yellow metal in Iran is higher than in the market of its competitors.