Gold coins market booms in Iran

TEHRAN (Commodity Online): Following India and China, it is now Iran that is mopping up gold as precious reserves for the country. Iran's central bank said last week that it will inject 5 million newly-minted gold coins into the domestic market in order to control rising gold coin prices.

At Thursday's price of 2.8 million rials (about $280) for a standard gold coin in Iran, the total value of the planned intervention would amount to $1.4 billion.

The price of gold coins in Iran has risen sharply in line with developments on international markets where gold bullion has risen 28 per cent this year to a record high $1,122.85 an ounce.

Many Iranians buy gold coins as wedding gifts and also as a long-term investment. A standard gold coin weighs around 8.13 grams. It is also sold in smaller denominations of half a coin and a quarter of a coin.

'Five million gold coins, minted by the Central Bank of Iran, will be supplied to the market beginning on Saturday,' Central Bank Governor Mahmoud Bahmani said.

The Irna report did not give more details on the reasons for the central bank's planned gold market intervention, but it appeared in part to be an attempt to help bring down inflation and reduce liquidity in the economy.