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Bahar Azadi benchmark gold coin climbed 2.07% on Saturday and was sold for 9.84 million rials ($325 at the official exchange rate). Mohammad Keshti Aray, president of Gold and Jewelry Union, said that the recent rally in global gold prices is influenced by the start of the Chinese New Year (Monday) and the subsequent surge in demand in the world’s second largest economy, ISNA reported.
Elaborating on other factors affecting the domestic gold market, he said higher prices for the precious metal is normal as the country moves closer to the end of the calendar year (March 19) and prepares for the annual holiday season when most families exchange gifts, namely gold coins.
“Gold coin prices are now more volatile compared to one month ago which indicates that the market is out of recession,” he said.
The shocks and shakes in the global economy has lifted interest in gold, making it among the best performing assets since the start of 2016 with a gain of nearly 10 %.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose to 22.3 million ounces on Thursday, the highest since late October.
Gold rose to a three-month high in volatile trade on Friday, as a mixed US jobs report prompted investors to reassess the outlook for US interest rates this year, putting bullion on track for its strongest weekly performance in more than a year.
“The futures curve is showing that the probability of a March (rate) hike by the Federal Reserve has fallen to around 10%, around the lowest levels last seen in October. But there is a greater than 50 % probability there will be an additional hike this year,” Suki Cooper, precious metals analyst for Standard Chartered Bank in New York told Reuters. “This has buoyed the risk-off sentiment that has boosted gold prices.”