Gold purchases soar in Iran due to fear of fresh US sanctions

Tehran: The demand for gold has increased in Iran because of the panic created after US President, Donald Trump announced his intentions of imposing fresh and harsher sanctions against Iran. The report of the World gold Council claims that a record decline in the Iranian Rial is also one of the reasons for this increase in the demand for gold. The international organisation has noted that this is the first time in the last four years that the demand for gold in Iran has risen so much. It is claimed that the Iranian people are hastily investing in gold, fearing the fresh United States sanctions.

The World Gold Council has said that there has been a three-fold increase in the sale of gold in Iran in the second quarter of this year. Iran has purchased 15.2 tonnes of Gold in the second quarter of this year, because of the increased demand for the bricks and coins in Iran. The gold purchased by Iran in this single quarter accounts for the gold purchased by all the middle-eastern countries in the last three quarters. There has been no instance of such high purchase of gold by a middle-eastern country in the last two years.

Saudi Arabia was leading in the gold purchase till the year 2016. The United Arab Emirates was next in line after Saudi in Gold purchases. But as per information, the Iranian gold purchases have increased over the last two years. Economic uncertainty seems to be the reason behind such high purchases of gold in Iran. In view of the falling price of the Iranian Rial, Iranian people are seen to be putting more faith in gold.

US President Trump may announce fresh sanctions against Iran on Monday. After withdrawing from the Iran Nuclear Deal, President Trump had issued a deadline of 6^th of August to Iran, as well as its own European allies, which were party to the Iran nuclear deal. President Trump had warned that if the European allies did not withdraw from the nuclear deal or Iran did not come forward for a fresh negotiation of the deal- accepting the conditions set by the United States, the sanctions imposed would become much harsher.

Trump had indicated imposition of sanctions against the Iranian purchase of precious metals like Gold and Silver. Subsequent to this announcement by Trump, the Iranian Rial plummeted to less than half of its earlier value. The value of the Iranian Rial slipped to more than 100,000 Rial to a USD from 45,000 Rial to a USD. The international analysts have claimed that the Iranian people and traders have lost faith in the Iranian Rial and the increasing investment in gold only proves the same.

The Iranian population wants a safe investment and therefore, they are more inclined towards purchasing gold, informed Iranian investment banker Masood Gholampour. The gold purchase frenzy in Iran will continue as it is, till the end of this year or it could even increase further, claimed an analyst.

Meanwhile, the Rouhani government is cornered due to the declining Iranian currency value. The opposition parties in the Iranian Parliament and the Commanders of the Revolutionary Guards have also questioned President Rouhani regarding the slide of the Rial. The Revolutionary Guards commanders are pressurising President Rouhani to stop the slide of the Iranian Rial. But considering the intensity of the United States sanctions, it seems that stopping the slide of the Rial is out of bounds for President Rouhani.