The COVID-19 pandemic has made a thorough impact on the daily lives of consumers. In Iran, it will also affect the physical gold market. Due to new restrictions, the trading of bullion in a physical capacity will grind to a halt for at least two weeks.
A Temporary Halt for Iran’s Gold Market
This change of pace in Iran is not entirely surprising. Similar to other countries, the domestic COVID-19 situation gets out of hand. To curb the spreading of the virus itself, public places will need to be shut down temporarily. In this case, the country’s gold market is one of the victims of this renewed lockdown.
Bullion market stalls and businesses operating under TGJSU auspices will be forced to shut down for two weeks. This is bad news in terms of seeing global gold demand rise, but the overall impact may be fairly minimal. Iran is a prominent country where bullion is concerned, but this year has proven to be an exception for many different reasons.
Additionally, any shop selling gold or silver jewelry, bars, and coins – or those operating along streets or in malls – will be forced to shut down as well. Accessing any precious metals in Iran will prove very difficult in the weeks to come. It is psosible these measures will be extended once the two-week period comes to an end.
As more and more cities across Iran continue to note higher coronavirus infections and deaths, measures like these were unavoidable. For now the regions hit the hardest will face the same restrictions. Depending on how the domestic situation evolves, more areas of the country may see similar limitations being imposed.
Not the First Market Suspension
It has been a rough year for Iran’s gold market in 2020. Earlier this year, a similar restriction was imposed, but it lasted for a full month. That too had to do with the COVID-19 pandemic, as there was genuine fear over this new virus. With a second wave now in place, similar measures appear more than warranted.
One thing to keep in mind is how not all of the gold trading occurs officially. There is an “unofficial market” for bullion, primarily thanks to various online platforms. It remains unclear if this trading can offset the expected price decline for gold and silver, however. International markets already show less of an appetite for precious metals as of late.
The big question is how this will effect the global gold market. In a year where global demand for bullion and silver is already low, more restrictions like these can have significant consequences. At the same time, it may also introduce some unexpected market momentum.