Gold for Oil: India and Iran Ditch Dollar – Report

It has been reported the India has purchased oil from Iran using gold, bypassing the US dollar. Many are predicting that making purchases in gold as opposed to currencies is going to become a growing trend and this is just the start of it.

Created: Jan 23, 2012 14:13 GMT; Last Modified: Jan 24, 2012 14:28 GMT
Forex Crunch

According to a new and yet unconfirmed report, India bought oil from Iran using gold. India certainly has the gold resources to fund the oil, while Iran is under pressure by the West, due the continuation of its nuclear program.

There were reports that officials have been floating this idea for some time, and now, as the EU finally decided upon an oil embargo on Iran, more details became available, yet still pend confirmation.

Download the full forex outlook for Q4, which includes an in-depth analysis of the Middle Eastern issues by joining the mailing list in the form below.

Oil is priced in US dollars, and bypassing the greenback posed challenges for both parties. Two banks are reportedly involved in this deal: India’s state owned UCO Bank and Turkey’s state owned Halkbank.

Both banks don’t have any business with the US and therefore are less vulnerable to sanctions. According to the report, an Indian delegation has spent time in Tehran and finalized the details of the transactions.

The annual capacity of trade between these two countries is 12 billion dollars. With gold trading at around $1668, that is around 7.2 million ounces of gold.

The step joins Russia and Iran’s announcement to begin trading in their own domestic currencies rather than use the US dollar – a reserve currency.

These details about the gold for oil deal come on the day that EU officials announce an oil embargo on Iran starting on July 1st. Tensions between Iran and the West are mounting and oil is already on the up.

The time it took the EU to reach the decision, and the late implementation date make it very easy for Iran to enlarge exports to oil hungry and fast growing Asian countries.

The use of gold for buying the No. 1 commodity, will likely have positive implications for the precious metal, if this report is confirmed and especially if the use of gold widens to China – the world’s No. 2 economy.

To see original article CLICK HERE

Follow Us

Share Page

Login

Get access to the latest trading information, tools to help your investing, and much more!

Login   Sign Up

Search

Weekly Charts

Current Spot Prices

Gold$1283.22
Silver$20.39
Platinum$1462.50

Special Offers

 
 
© 2012 Swiss America Trading Corp. All Rights Reserved.   |   Privacy Policy   |   Site Map   |   Contact Us   |   Mobile Version
SWISS AMERICA and Logo are trademarks of Swiss America Trading Corp.
Where did you hear about us?
Roger HedgecockRay Lucia
Pat BooneMichael Savage
Bill CunninghamOther
iHeart Radio/Rush Limbaugh
×