Title: Domestic Gold and Coin Prices See Notable Adjustment as Market Dynamics Shift
Tehran Gold Union Head Details Weekly Market Trends
In a week marked by significant global gold price surges, the domestic Iranian market for gold and coins experienced a contrasting trend of price decreases, according to a detailed report from Nader Bazrafshan, head of the Tehran Gold and Jewery Union. The analysis covered market activity from August 30th to September 5th.
Global Gains, Domestic Declines
Bazrafshan noted that the international gold market witnessed substantial and somewhat unexpected upward momentum. Over the week, the price per ounce of gold rose by $102, reaching $1,949. This global rally, however, did not translate into higher domestic prices.
Conversely, the local market saw a decline across various gold and coin products. The price of one Mithqal (approx. 4.6 grams) of 17-karat gold fell by 530,000 tomans to 36 million and 950,000 tomans. Similarly, the price of one gram of 18-karat gold decreased by 122,000 tomans, settling at 8 million and 530,000 tomans as a baseline for gold ornament transactions.
Significant Drop in Coin Prices
The coin market mirrored this downward trend. The modern design Emami coin saw a reduction of 2.5 million tomans, bringing its price to 92 million and 300,000 tomans. The older design coin also decreased by 2.4 million tomans to 86 million and 300,000 tomans. Other coin denominations followed suit, with the half-coin, quarter-coin, and one-gram Central Bank coin all registering decreases of 1.7 million, 2.1 million, and 400,000 tomans, respectively.
Furthermore, the market premium, or “bubble,” on coins decreased by 1.2 million tomans over the week, currently standing at 9 million tomans. Bazrafshan characterized the overall domestic market as experiencing a calm, low-trading, and decreasing period despite the opposing global climate.
Key Factors Behind the Domestic Trend
The head of the union identified two primary factors driving the domestic price adjustment: a noticeable stagnation in transactions and a reduction in buyer demand. He emphasized that a decrease in the foreign exchange rate within the domestic market was a crucial element in the price drops.
“The lack of demand in the market led to these relatively favorable decreases in prices,” Bazrafshan stated.
Limited Impact of Coin Auction Plan
Commenting on the potential effect of the national coin auction plan on market prices, Bazrafshan clarified that the sales are conducted as auctions without a fixed price, where the highest bidder wins, subject to a five-coin limit per person designed to aid genuine consumers.
He noted that because the auctions are conducted in this manner, the final sale prices often align closely with prevailing market rates. Consequently, he assessed that the auction initiative does not exert a substantial influence on either decreasing or increasing overall market prices for these assets.
In conclusion, the most significant influence on the domestic gold and coin market this week was attributed to a relative decrease in the foreign currency rate, which ultimately led the Iranian market to move counter to the global upward trend.