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Payvand Iran News ...
1/26/02 Bookmark and Share
The gold business in Iran
Tehran, Jan 26, IRNA -- Iranians use gold for two basic purposes-- as ornaments resorted to primarily by women or as savings--the second being more prevalent.

Saturday's edition of the English-language newspaper `Iran Daily, in its Economic Outlook column, quoted comments made by jewelry designer and editor-in-chief of the international publication Gold and Jewels, Mohsen Movahhedi, published in the Farsi daily `Hamshhri'. The jeweler, the daily wrote, believes that the gold industry in the country has high potentials for generating employment and exports.

Unfortunately, he pointed out, there are no available estimates on the value of gold and jewelry transactions in the country.

Assuming that about 10 million Iranian women, above 15, are keen on using gold as ornamental items and that each trades in or has 30 grams of gold in her possession, an annual 300 tons of gold (quite a reasonable estimate) would be traded each year, he said.

The jeweler warned of illegal importations of gold into the country.

"Regretfully, the officials have failed to adopt a realistic view towards this predicament. They consider gold and jewels as luxurious decorative items whereas in fact they are valuable handicrafts," he said.

He went on to mention the useful qualities of gold.

"It is highly durable and its value is preserved over time. It is exchangeable like currency. Importing and exporting the precious metal is highly profitable provided trading is governed by transparent rules."

The jeweler further saw an important advantage to be derived from the gold business: "A substantial number of jobs can be created in the sector through well-defined planning." Finally, he said "gold and jewelry items can generate value-added and promote non-oil exports."

Karim Ahmadi, an officer of the Iranian Gold and Jewelry Union, reenforced Movaheddi's claim that no statistics are available on supply and demand in the gold market.

Presently, a few players are involved in the industry, each one producing a monthly 100 to 150 kilograms of gold.

"People in most parts of the world deem gold as durable capital. So, the valuable metal is purchased to be kept as savings, used as ornaments, gifts or as a costly piece of art."

Ahmadi stressed that Iran's gold market is highly dependent on international markets. Domestic production is insufficient, pushing traders to make up for the deficiency by importing from foreign producers, he added.

The expert insisted that Iranian gold is unique and of special value worldwide due to its "fine appearance and high value-added" and gave assurances that activating the gold business would earn the country substantial forex revenues.

He advised entrepreneurs to draw on the experiences of Dubai, India, Italy, U.S., Thailand, South Korea, Japan, Indonesia, Turkey, Hong Kong and Germany in order to raise the status of the gold industry in the country. He said gold prices used to fluctuate much until ten years ago when people gained access to the Internet, satellites and other technological utilities.

Today, he added, gold prices in Iran are closely tied to those in international markets. In other words, there is a close interdependence between gold rates in Iran and other countries.

Pointing to the impact of oil prices on the gold market, Ahmadi recalled that until a few years ago gold prices were believed to decline with a rise in oil rates and vice versa.

However, he added, this assumption has now been "modified with oil giving its place to other energy items."

He lamented the low production of gold in the country, saying "total amount of gold extraction registered so far--according to the World Gold Council--has been 150,000 tons, which is insignificant compared to global demand."

... Payvand News - 1/26/02 ... --



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