Wednesday, June 19th 12:45 PM IST

Rouhani victory creates initial impact on Iran Gold sector

# Iran gold reserves  # Central Bank of Iran  # Hassan Rouhani  

Apart from the efforts of the new government led by Rouhani, Iran's gold industry also requires to play a mjor role to keep the gold sector unharmed, analysts said

(BullionStreet): Hassan Rouhani's victory in ultra orthodox Iran raised hopes not only for Iranians but for the western world that imposed sanctions against them.

What Rouhani do to move away immediately from Ahmedinejad's policies to make an impression on Iranians and the rest of the world is yet to be revealed but his victory has already created a positive impact on country's gold and share markets.

Analysts said victory of the only reformist candidate in the elections could signify more tempered policies toward bringing balance in the country's beleaguered economic and political scene.

According to earlier reports, price of gold and the dollar drops after the election results. The price of gold in Iran had risen sharply due to western sanctions as people began brisk buying to safeguard from climbing inflation.

Analysts said gold prices would remain on the lower side at least till Rouhani sworn in as president in August.

They added that Rouhani might consider injecting more gold coins into the domestic market in order to control rising gold coin prices and also to help bring down inflation and reduce liquidity in the economy.

Treasured as a store of value, Iran's gold coins, minted over centuries, are also culturally important. They were traditionally stamped with the faces of kings.

The dollar also dropped against the rial as on Wednesday the exchange rate for the dollar fell from 36,200 rials to 34,700 rials.

Iran's national currency has seen a drastic fall in the past two years with the intensification of US and EU sanctions on Iran.

Gold is considered as the only reliable investment option for Iranians after sanctions began to hit Iran’s economy.

Iranian's gold purchase are mainly driven by fears about the economy, particularly the risk of soaring inflation and a wobbly currency. Many Iranians are worried that keeping their wealth in rials is a risk.

Apart from the efforts of the new government led by Rouhani, Iran's gold industry also requires to play a mjor role to keep the gold sector unharmed, analysts said

They need a great deal of capital and people engaged in this industry are obliged to use large amounts of circulated capital to purchase raw gold in the form of ingots and also to ensure that this move will not increases the price of gold.

New rays of hope that came along Hassan Rouhani's victory will surely to reflect in Iran's gold sector too, analysts said.

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