Financial Tribune- Gold has surged in Tehran’s market with the 18-karat gold price reaching 1,226,360 rials ($31.67) per gram on Wednesday to set a five-year record.
The yellow metal–the most widely used in Iran’s jewelry-making industry–had started its rally since July 13 and faced fluctuations.
“The upward trend, however, gained new momentum as the US city of Houston faced worsening flooding,” Mohammad Keshti-Aray, the head of Tehran Gold and Jewelry Union, was quoted as saying by ISNA.
“The storm has hurt the global economy.”
Harvey, the most powerful hurricane to strike Texas in more than 50 years, first made landfall late on Friday and killed at least two people. It has since lingered around Texas’ Gulf Coast, where it is forecast to remain for several more days, drenching parts of the region with a year’s worth of rain in the span of a week, Reuters reported.
Global gold prices continue to trade firmly above $1,300 per ounce. One technical trader says the precious metal has room to go higher, as charts point to more gains.
The global gold rally made the banner headline of the leading Persian economic daily, Donya-e-Eqtesad, on Tuesday.
“We’re seeing a pretty impressive test of the recent range highs and I think that based on what the macro situation looks like, gold should push higher,” Todd Gordon, founder of the TradingAnalysis.com, told CNBC.
The gold traded as high as $1,311.31 an ounce on Wednesday, its strongest level since November. Many pundits believe that gold’s rally could carry all the way to $1,400 an ounce since a “perfect” atmosphere has developed, including low interest rates, a weak US dollar, a pickup in physical buying and continued geopolitical tensions.
Keshti-Aray also pointed to the link between the US dollar and gold prices and said a sharp decline in the US dollar has supported gold prices in what is usually an inverse relationship between the two.
This is while, in Tehran market, the greenback gained about 90 rials and changed hands for 38,720 rials on Wednesday.
According to Tehran Gold and Jewelry Union’s website, the rial was quoted at 47,340 to the euro, another high demand currency in Iran.
Keshti-Aray also elaborated on the bull run in the coin market, especially the unreasonable growth of Quarter Azadi gold coin.
“Coins that experience more demand will witness a bigger rise in prices,” he said.
The Quarter Azadi coin was sold for 3,810,000 rials ($98.4) almost unchanged compared to a day before. The Half Azadi coin lost 20,000 rials of its value and fetched 6,520,000 rials ($168.4).
Emami gold coin and Bahar Azadi gold coins were traded for 12,232,000 rials ($315.9) and 12,070,000 rials ($311.72) respectively.