Economy, Business And Markets

Bullion Market Struggling With Supply Shortage

Bullion Market Struggling With Supply ShortageBullion Market Struggling With Supply Shortage

The Central Bank of Iran is responsible for managing and monitoring the bullion market, the head of Iran’s Gold, Jewelry, Silver and Precious Stones Producers and Exporters Association said on Friday.

“The CBI should mint new gold coins now that demand for gold coins is on the rise. Such a measure will make up for the shortage of supply and halt the rally in the price of gold coins,” Ebadollah Mohammad-Vali was also quoted as saying by ISNA.

The Azadi bullion coin has surged to more than 1 million rials ($33) in the last quarter (ending March 19).

Pundits have listed a number of reasons for the increase in the price of benchmark coin, among them a surge in the global price of gold, the domestic demand for gold and the decline in the US dollar’s rate in Iran’s forex market.

Azadi was in the territory of 10,090,000-10,130,000 rials ($333.97-335.30 at market exchange rate) this week compared to 9,980,000 rials ($ 330.3) at last Saturday’s close.     

“In the final days before the start of the New Persian Year (March 20), the demand for gold coins rises and so do the prices. The market should be supplied with gold coins to prevent price bubbles,” Mohammad-Vali said.

“While it is normal to see some fluctuations in the market, they should be kept in check.”

The official predicted that the new Iranian year (starting March 20) will be a good year for Iran’s gold producers and exporters, predicting that domestic gold production will surge.

Pointing to Turkey, Iraq, Thailand and Hong Kong as the destinations for Iran’s gold exports, Mohammad-Vali said the volume of gold exports will increase in the coming year, as Iranian exporters will try to find new markets for domestically-manufactured gold.