Iran relies on gold reserves to cushion against forex shocks amid imposed war.

Iran relies on gold reserves to cushion against forex shocks amid imposed war.

Iran's gold reserves have proven to be a critical tool in stabilizing foreign currency prices and preventing forex shocks amidst the ongoing geopolitical tensions and military aggression. According to an economic expert, Hassan Hassan Khani, Iran has imported more than 100 metric tons of gold in the past year to bolster its reserves, enhancing its ability to manage potential economic shocks [1].

The Central Bank of Iran (CBI) has been actively converting a significant portion of its reserves into gold. In March, the CBI reported that Iran was among the top five gold-buying nations globally, with approximately 20% of its reserves converted to gold [1]. This strategic move comes in response to the government's decision to reduce import tariffs on gold to zero, aiming to boost reserves and facilitate the return of funds held in other countries due to US sanctions [1].

The recent escalation of tensions between Iran and Israel, with the latter intensifying attacks on strategic and government targets in Iran, has underscored the importance of Iran's gold reserves. The Israeli military's actions have led to a significant increase in crude oil prices, with both US crude oil and global benchmark Brent seeing substantial gains [2]. This volatility in oil prices, coupled with potential disruptions to global oil supplies, highlights the need for Iran to maintain robust foreign currency reserves.

Gold's appeal as a hedge during times of political and economic uncertainty has been further emphasized by the ongoing conflict. Experts note that gold's utility extends beyond its traditional role as a safe-haven asset, with increasing recognition of its value as a stable, reserve-like asset in investment portfolios [3]. Despite recent volatility, gold prices have remained relatively stable, reflecting the metal's enduring appeal as a store of value in uncertain times.

In conclusion, Iran's strategic use of gold reserves to stabilize foreign currency prices and prevent forex shocks is a prudent response to the current geopolitical environment. As the conflict between Iran and Israel continues to unfold, the role of gold as a financial safety net will likely remain prominent.

References:
[1] https://www.presstv.ir/Detail/2025/06/22/750037/iran-relying-gold-reserves-prevent-forex-shocks-imposed-war-expert
[2] https://www.cnbc.com/2025/06/19/oil-prices-israel-iran-trump-ayatollah-khamenei.html
[3] https://m.economictimes.com/news/international/us/gold-price-gold-rate-predicted-by-experts-amidst-iran-israel-war/articleshow/122007061.cms