Gold coins kept rallying nationwide on Sunday, taking its lead from Tehran's market, in signs that investors are showing renewed interest in the safe haven asset.
The rally, which took off on the first trading day in Iranian markets on Saturday, gathered force on Sunday, sending the benchmark Bahar Azadi's price to 24.39 million rials ($578).
According to Tehran Gold and Jewelry Union's website, Azadi gained 4.8% the previous day with Half Azadi reaching 12.08 million rials ($286), up 5.01% over Saturday's close.
The initial bull run in the gold coin market was fueled by the looming prospects of US sanctions, which are expected to take effect in the coming months.
US President Donald Trump pulled out of the international nuclear deal with Iran—formally known as the Joint Comprehensive Plan of Action—on May 8 and said he would reimpose sanctions within 180 days, prompting several European companies to announce they would end business with Tehran before the Nov. 4 deadline.
Since then, banks, insurers, shipping companies and European oil refiners have been gradually severing ties with Iran, complicating the efforts of European and other countries to keep the nuclear deal alive.
European powers have been scrambling to salvage the agreement. Foreign and finance ministers from the three European countries—France, Britain and Germany—have written to US officials to stress their commitment to upholding the pact and to urge Washington to spare EU firms active in Iran from secondary sanctions.
Expecting a further slide in the value of rial to 7,000 per US dollar, investors have scrambled to buy gold coin to hedge their property.
Analysts have cited a trading ban on foreign currencies by exchange shops and limits on the possession of foreign exchange as other reasons for the rally.
The government decided to unify the dollar's exchange rate at 42,000 rials on April 9 in the wake of a sharp slide in the value of rial.
According to the measures, the US dollar for all purposes, including imports, travel, overseas students and research projects, will be offered by the government at the exchange rate of 42,000 rials, which has since increased to 42,210 rials.
According to reports, the dollar was being traded in the black market for 65,000 rials. As of Sunday, the rial was quoted at 80,800 to the euro and 92,070 per pound.
The announcement was later followed by several other measures approved by the Cabinet and subsequently notified by CBI.
According to the new rules, possession of foreign exchange by individuals is allowed only up to a ceiling of €10,000 or its equivalent in other currencies and anyone possessing more than that amount should either deposit it in a bank or sell it to the banking system.
The central bank has also launched the Integrated Foreign Currency System (locally known as Nima) to track all the forex transactions involving banks, exchange houses, importers and exporters.
