The impact of monetary volume and financial circulation on controlling the price level of gold in Iran

Gold price in Iran is not only due to changes of price in all around the world, but also the internal-subjective factors contributing to an excessive inflation play very important role in price fluctuations for gold. A decreasing in a currency's value and saving gold as an asset leads to decrease in the value of the Rial. According to the sayings mentioned, a response to such questions as: what impact does the monetary volume and financial circulation put on the gold price? and does controlling the monetary variables influence controlling the gold price? has to be provided.The outcomes of the present study showed that only controlling the monetary variables could not be helpful for avoiding the increase of price levels. In most cases, monetary variables could be determined through financial variables.Controlling monetary volume has not only led to the decrease of inflation rate, but also it has intensified the ascent trend for inflation. Inflation curb through continuous decrease of the currency rate in a long term could increase people’s trust toward Rial by which people would be intended to save the currency and do their investment in financial markets.Consequently favorable provisions for investment and increase of internal investments would be provided leading to the decrease of unemployment in Iran

Keywords:

monetary volume , financial circulation , gold price , controlling the price , inflation