Iran's gold industry needs support

TEHRAN, Iran, May 28

Trend:

Iran's gold industry needs proper policies to balance prices, said the head of the Union of Manufacturers and Exporters of Gold, Jewelry, Silver and Precious Stones,

Abdullah Mohammad Vali has discussed the increase of gold coin price in an interview with Trend.

"Increase of gold and gold coin price was predictable, since the global gold price per ounce increased in a month up to $1,790, while the USD rate in Iran's foreign currency market reached 170,000 rial," he said.

"Some banks have purchased gold coin via stock exchange by paying 5,000,000 rial [about$119] more than gold market," he said. "Significant volume of gold coins have been purchased by banks that was one of the reasons for increase of gold coin prices in Iran alongside the rise of global gold price and USD rate."

"The supply and demand market is not balanced, the Central Bank of Iran should implement new policies over price of gold and gold coin, otherwise the prices continue to rise," he added. "There is also an issue of intermediary dealers in sale of gold and gold coin; the government policy should encourage people to invest in financial system and small scale companies instead of investing in gold and foreign currency market."

"The Central Bank of Iran's suggestion of import tax exemption of gold, silver and platinum was approved by the Supreme Council of Economic Coordination, and this would lead to free import of these commodities," he added.

He went on to say that the outflow of gold from Iran is a matter of concern, and the policy of import tax exemption should have been implemented last Iranian year (started March 21, 2019).

"The exemption of gold import will not affect the price in domestic market, since businesses are not booming in current situation; meanwhile, the production units in this guild need cheap loans and advances from the Central Bank of Iran," he said. "The gold industry situation is not improving and the government should invest in this sector to have income."

The official statistics show the small businesses in this sector need 800 million rial (about $19,000) of investment, while big companies in gold industry need 8 billion rial (about$190,000), he noted.

"The private sector can also invest in the sector and increase employment, export and foreign currency revenues," he said.