Turkey is microcosm of int’l gold market: Council
At an average of 181 tons per annum over the past 10 years, Turkey is the world’s fourth largest consumer of gold, accounting for around 6 percent of global consumer demand. AA PhotoGold plays a huge role in Turkish consumers’ lives and the economy, making the country the world’s fourth largest gold consumer, says a new report by the World Gold Council.
At an average of 181 tons per annum over the past 10 years, Turkey is the world’s fourth largest consumer of gold, accounting for around 6 percent of global consumer demand.
The “Turkey: Gold in Action” report, published on Jan. 22, described Turkey as a "microcosm of the global gold market" as it is home to the entire gold value chain from mining and refining, to jewelry design and investment.
Turkey’s long tradition of gold demand, underpinned by a deep cultural heritage, strong manufacturing capacity and a substantial coin market has resulted in households accumulating an estimated 3,500 tons ($145.3 billion) of gold tucked “under-the-pillow,” a term used in Turkey to refer to physical gold stored by the general population, the report stated.
The World Gold Council assessed the role that gold plays in consumers’ lives, examined the economic contribution of the entire supply chain, and explored how the metal has been monetized to support the national economy.
It found that at an average of 181 tons per annum over the past 10 years, Turkey is the world’s fourth largest consumer of gold, accounting for around 6 percent of global consumer demand.
The council also estimated that Turkish households have accumulated at least 3,500 tons of “under-the-pillow” gold. “This note explores the role gold plays across the entire value chain and assesses gold’s economic contribution to Turkey,” the report said.
“In 2012 alone, gold fabrication, consumption and recycling added at least $3.8 billion to Turkey’s economy. An innovative Central Bank policy, which was introduced in 2011, has incentivized commercial banks to create a range of gold-backed banking products to mobilize Turkey’s stock of gold. This improved the health of the banking sector by reducing costs and improving liquidity, as well as ensuring commercial banks boost their gold reserves,” said the report.
Policymakers have now successfully seen around 250 tons of gold ($10.4 billion) drawn into the financial system and put to work supporting Turkey’s economy, according to the report.
“Amid a challenging global economic climate, Turkey faces ongoing political and social pressures to ensure that it steers a steady economic course. Gold represents many things in this society from employment for over a quarter of a million people in the gold industry, to an investment protecting people’s wealth against the ravages of inflation and currency weakness. It is also a unique example to the rest of the world of how gold can successfully be put to work at the core of a nation’s financial architecture,” Alistair Hewitt, the head of market intelligence at the World Gold Council, said in a press release.
Turkey’s gold mining industry is small but growing quickly, and gold production has increased every year since 2001, growing from two to 33.5 tons in 2013, said the report.