FEATURE-Iranians go for gold amid inflation and currency fears

Central Bank sending mixed signals on currencyBy Mitra Amiri Rosetta Stone Software TEHRAN, July 6 (Reuters) - Leafing through an old familyphoto album, 74-year-old Molook Amini wished she could afford tobuy a gold coin as a wedding gift for her youngest grandchild asdid for others. "It was always a tradition to give gold coins to closefamily members on special occasions. This year for the firsttime I can not afford to do it anymore." Whether for wedding gifts or as a way to squirrel awaysavings, Iranians have a long history of buying gold coins,widely available from dealers in high street shops and bazaars.But recently, what was a steady demand has become a gold rush. Amid global economic uncertainty, the price of gold on worldmarkets rose steadily in the first half of 2011 andIranian coins appreciated in line with that. Rather than cashingin their coins for a profit, Iranians continued to buy them inever larger numbers. "Usually, as the price of an item increases, demand willdecrease. But in the case of gold, it seems that higher pricesare creating more demand," said a gold retailer in Tehran whoasked not to be identified. The Iranian gold rush Rosetta Stone languages was mainly driven by fears about thedomestic economy, particularly the risk of soaring inflation anda wobbly currency, he said. In addition to concerns about a global double-dip recession,the economy has been hit by sanctions as the United States leadsglobal pressure on Tehran over a nuclear programme many statessay is aimed at building atomic weapons, a charge Iran denies. "The reasons that people are drawn to these safe assets --gold coins and hard currency -- are firstly a limited choice ofinvestment opportunities, and secondly a fear from the weaknessof the national currency," said an economist who asked not to benamed. "These are results of more potential economic instability inthe country."KING AND CLERICS Treasured as a store of value, Iran's gold coins, mintedover centuries, are also culturally important.They were traditionally stamped with the faces of kings.After the 1979 revolution, the Islamic Republic started to issueBahar-e Azadi (Spring of Liberty) coins, some of which wereengraved with the image of Ayatollah Ruhollah Khomeini, Rosetta Stone English V3 who ledthe uprising against the last shah.

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