Tehran, Iran, November 25
By Mehdi Sepahvand –- Trend:
Statistics show that the gold futures contracts are growing in favor on Iran Mercantile Exchange (IME).
Accordingly, while in the period between March 21 and November 11 a daily average of 8,800 gold purchase contracts were filed, over the past two weeks the number rose hugely to hit 33,000, Mehr reported recently.
A precious metals futures contract is a legally binding agreement for delivery of gold or silver in the future at an agreed-upon price. The contracts are standardized by a futures exchange as to quantity, quality, time and place of delivery. Only the price is variable.
Hedgers use these contracts as a way to manage their price risk on an expected purchase or sale of the physical metal. They also provide speculators with an opportunity to participate in the markets without any physical backing.
Recently, Forbes mentioned in an article that it is best for Iran to go for coin as currency instead of the rial, expressing uncertainty whether government decision to change the currency from the rial to the toman (i.e. dropping one zero) would be of any use.
While inflation has come down from its October 2012 peak, which I measured at a rate of 62 percent per month, the rate is still quite elevated, with the official annual inflation rate sitting at 9.6 percent.
The price of one gram of the 18-karat gold increased by 1.02 percent over the last Iranian week to stand at 1,256,370 rials (about $30.77) on the weekend to November 17.
In the meantime, the price of Bahar-e Azadi gold coin added 3.32 percent.
The data available on the website of the Tehran Gold and Jewelry Union shows that the gold coin was traded at 12,960,000 rials ($318.3 according to the currency rate in free market on the same day) in the beginning of the Iranian week on Saturday.
However, Bahar-e Azadi was valued at 13,390,000 rials ($327.9) in the end of the Iranian week.
Meanwhile, the value of the US dollar against Iranian rial in the free market increased by 0.29 percent to post 40,829 rials on Thursday.
The Central Bank of Iran (CBI) put the official rate of the US dollar at 35,237 rials on Thursday, an increase of 0.13 percent compared to Saturday.