Dollar, Gold Resume Fresh Rally

The US dollar was sold for 39,540 rials on Thursday, resuming the rally that had gripped the market after Donald Trump’s election victory last month.  

According to Tehran Gold and Jewelry Union’s website, the rate at Thursday’s close was 9.8% higher than the average rate in the past six months. The American currency was traded for 34,590 rials on June 18. The rate was 3% higher than the average exchange rate in the past 30 day. The markets were closed on Saturday.

The currency is expected to grow further in the coming days, considering the US Federal Reserve’s Wednesday decision to increase interest rates by 0.25%.

The dollar soared to a 14-year high against a basket of currencies in global markets after the Fed raised its benchmark interest rate for the first time this year and just the second time since the financial crisis of 2008—from 0.50% to 0.75%. Further rate rises are likely in 2017.

Morteza Imani-Rad, a global markets analyst, believes that the US Federal Reserve’s measure would pave the way for greater speculative activities in the Iranian market.

“The US dollar and gold will experience a surge, when uncertainty grows in Iran’s markets,” Khabaronline quoted Imani-Rad as saying in a report on Friday.

The report pointed to Central Bank of Iran’s plans for unification of foreign exchange rates, saying that the US dollar is unlikely to cross the threshold 40,000 rials in the coming days. CBI has been controlling the rates by lifting the supply side of the market.

The CBI set the official US dollar’s rate against the rial at 32,255 rials on Thursday, higher than Wednesday’s 32,226 rials.

Khabaronline expects higher growth for gold in the coming days.

Mohammad Keshti-Arai, the head of TGJU, also predicts a surge in gold prices in the domestic market.  

He believes that domestic markets are not as much impacted by international trends, as they are by forex rates, especially in the coming weeks.

“In the past week, gold prices decreased in global markets, but they grew in Iran,” he said.

According to Keshti-Arai, Bahar Azadi Gold coin was priced at 11,430,000 rials ($289) on Friday.

Half Bahar Azadi and Quarter Bahar Azadi coins were sold for 6 million rials ($169) and 3.2 million rials ($80), respectively.

Euro was exchanged for 43,050 rials on Thursday while the British pound changed hands at 49,330 rials, lower than the previous day’s 49,600 rials.

The dollar soared to a 14-year high against a basket of currencies in global markets.