Iranians defy warnings to buy gold, dollar

Iranian authorities repetaed their claims that country’s currency, the rial is strong enough to withstood any crisis and urged people not to buy gold or dollar in a hurry.

However, they admitted the fact that Iran has seen an increase in the demand for foreign currency during the last few days, adding that there has been fluctuation in the foreign currency rates.

Recent sales of gold coins by country’s central bank evoked huge responses from people as large crowds were seen outside the various banks offering sales.

Many Iranians are reported to buy gold and dollars from black markets in response to rising inflation which climbed near twenty percent in recent times from as low as 8.8 percent.

Analysts said worries about the declining buying power of the rial and doubts over the currency’s stability are the main drivers behind the flight to gold.

Iran is considering a ban on gold imports to prevent people from buying, they added.

They said apart from rial’s decline,imbalance between demand and supply of gold is also make people to buy gold as a shield against risisng inflation in the country.

Authorities have vowed to solve the issue at the earliest possible time, although some of them have put the blame on the subsidy reform plan, which burdened the people and government alike.

The Islamic Republic is estimated to have over 300 tonnes of goldand is now believed to be among the 20 largest gold reserve holders. – BullionStreet

Posted by admin on Dec 29 2011. Filed under Gold predictions. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry