Abstract
The gold market has recently attracted much attention and gold prices have fluctuated over the past few years. Therefore, the aim of this study is investigate and analyze the trend of gold prices over the past five years in Iran. The importance of this topic is coming from uncertainty and volatility of the gold market, gold excitement and lack of a correct analysis of the market trends with reference to the probable factors which affect the gold price. The studys period refers to the ended five-year in December 2012. This research from methodological point of view is a descriptive-perspective analysis that examines the influence of variables such as the gold price on the market, the official exchange rate and non-official rate on the Irans market, the price of Brent crude oil, the global rate per ounce gold and foreign economic sanction. Vector auto regression model is used to analyze the results of the study. The results indicate that gold price is affected from exchange rates fluctuations and gold global rate, it is also noteworthy to mention that the most important factors affecting the recent volatility in the Irans gold market and the exchange rate is the economic sanctions which have been imposed against Iran.
Highlights
Gold is a precious metal which is classed as a commodity and a monetary asset
Due to the nature of the subject, to evaluate the gold price, exchange rate and oil world price and other variables introduced in the literature on Iran's economy, in this study vector autoregression (VAR), has been used
In relation to the impact of global sanctions against Iran, the results indicate that according to the five statements of the Security council during the period of the study, only two statement i.e. statement 1984, with emphasis on the global association about economic sanctions against Iran and statement 2049, with emphasis on the oil industry sanction and intercourse bounded with Iran's central bank, have significantly influenced on fluctuations of gold coin price the fourth research hypothesis is accepted by 99% significance level
Summary
Gold is a precious metal which is classed as a commodity and a monetary asset. Gold is a highly liquid metal; it can be readily bought or sold every moment of day, in large denominations and at narrow spreads. This is highlighted by [7] who note that total annual production of gold is cleared by the London Bullion Market Association every 2.5 days [26]. Gold is held in central banks reserves for a number of reasons: diversification, economic security gold maintains its purchasing power, physical security gold is a liquid asset, confidence cushion in a crisis, maintains value, income gold leasing, insurance against market crises. It should be noted that the aim of this study is to determine the behavior of the gold price in the emerging market of Iran in other words, determining the volatility’s impact of global gold price, exchange rate fluctuations, oil price and economic sanctions’ impact on gold price in Iran
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