The Central Bank of Iran is set to dump a whopping 45 billion euros in exchange for gold bullion and dollars as Gulf states also prepare to flee from the ailing single currency amidst debt turmoil in Europe that threatens to disintegrate the entire region.

According to the Iranian state website Press TV, Iran’s central bank has already begun converting its euro reserves into gold and dollars as a response to the “downward spiral” of the euro, in the first of a three phase movement to flee from the currency.

The report also claims that Gulf states are also beginning to switch their euro reserves into dollars and gold as some forecast the single currency could sink to parity with the U.S. dollar by next year.

“The new decision comes as the financial crisis that began in the US about two years ago resulted in the sharp devaluation of the dollar, pushing the Iranian government to order the replacement of the greenback with the euro in the country’s foreign exchange accounts,” adds the report.

This is all a far cry from the days when businesses in New York accepted payments in euros as the currency reigned supreme over the beaten up U.S. dollar.

The European Central Bank has blatantly been manipulating currency markets over recent days in an effort to rescue the euro, which has been in free fall.

Sinking to as low as $1.2111 yesterday, the euro staged a rapid and dramatic recovery against the dollar, soaring back to 1.2339, an intraday move of 250 pips and a transparent intervention that had “all the grace of a drunk Keynesian at an Austrian economists meeting,” reports Zero Hedge.

But while central bank interventions would in the past keep a currency buoyant for days or weeks, the euro immediately slipped down again, indicating a clear crisis of confidence and a currency in terminal decline.

Gold has hit record highs against all major currencies in the last few months as it remains the only true store of wealth in times of economic chaos and depreciating fiat money.

Demand for the precious metal is once again hitting fever pitch as the U.S. Mint announces that it has sold 190,000 1-ounce American Eagle gold coins in May, the largest amount in a single month for over 11 years.

Buyers in Europe are also desperately scrambling to purchase the scant amounts of gold available, with the Greek Central Bank now selling one ounce coins at the equivalent of $1,700 dollars, nearly $500 dollars above spot price.

“As long as governments continue to struggle with spiraling debts and are forced to crank up the printing presses, gold will continue to outperform currencies, a situation which is unlikely to change any time soon,” we wrote on April 30.

Now gold bulls like Peter Schiff are predicting the incredible – that gold could soar to around $10,000 an ounce as a consequence of a dramatic fall in supply due to significantly less gold mining. Gold companies now have to drill as much as 2.3 miles to get to the yellow metal in places like South Africa, whereas central banks merely need to press a button to increase the supply of depreciating fiat money.