According to Eetna, the rise in the dollar price in recent days, despite the significant drop in the global ounce of gold, once again showed that the exchange rate remains the main determinant of gold and coin prices in the domestic market.
Nader Bazrafshan, head of the Tehran Gold and Jewelry Union, advised traders not to enter trades in euphoric market conditions and to wait for relative price stabilization.
Divergence between the domestic and global market
In recent days, while the global ounce of gold experienced a notable decline, the price of gold and coins in the domestic market followed an upward trend.
According to Bazrafshan, this increase was not due to rising demand but mainly the result of a jump in the dollar price, and this divergence has caused some traders to doubt the future price trend.
Warning about price sustainability
The head of the union, referring to the experience of past months, said that gold and coin prices have repeatedly fallen after reaching new peaks following the release of a political or economic news item or even a slight fluctuation in the dollar rate; therefore the current price increase cannot necessarily be considered sustainable.
He recommended that people refrain from buying and selling during euphoric market periods and postpone transactions until prices have remained in a stable range for several days.
Low probability of returning to the 22 million toman channel
Bazrafshan, referring to the trend of the past two months, said 18-carat gold has mostly fluctuated in the 22.5 to 24 million toman range and the likelihood of prices returning to channels below this range is not very high; although if the Central Bank manages the currency market or the dollar price falls, the domestic market could enter a downward trend.
Scenario of global gold growth
He referred to analyses that report the possibility of the global ounce of gold rising to the 5,500 to 6,000 dollar range by the end of the calendar year; if this trend materializes, the domestic gold and coin market could gradually experience price increases as well.
Final recommendation
The head of the Tehran Gold and Jewelry Union emphasized in an interview with Tejarat News that in the early days of any upward wave, it is better for traders to wait a few days until price trends become clearer, because any political or economic news and any fluctuation in the exchange rate or the global ounce can lead to a rapid price reversal.