Soaring gold prices squeeze Türkiye’s jewelry sector

ISTANBUL

Soaring gold prices have dealt a heavy blow to Türkiye’s jewelry industry, with consumer demand for processed items slumping and domestically focused firms cutting production.

In Kuyumcukent, the country’s largest gold trading and manufacturing hub, a number of jewelers have been forced to shut their doors amid dwindling sales and rising costs.

Exporters say the gold import quota introduced in August 2023 triggered a loss of overseas customers, prompting several workshops to close in Kuyumcukent and relocate to markets where their clients are based, notably Dubai and Egypt.

Veteran jeweler and former Kuyumcukent administrator Habib Kocabaşoğlu noted that some of the departing operators are foreign investors who came to Türkiye about a decade ago, brought substantial gold to finance production, learned the craft locally, and are now transplanting the same model abroad.

Since the quota took effect, the sector has contracted nationwide, with Kocabaşoğlu estimating that Kuyumcukent has “emptied by 20 percent.” Another jeweler, who requested anonymity, said that as of January, around 300 additional workshops were reportedly preparing to file closure applications.

The steep climb in gold prices has further undermined workshop output by dampening retail demand for jewelry. Jewelers say most consumers remain net buyers of gold — few are selling unless to fund big-ticket purchases like homes or cars — but high prices have pushed buyers toward savings-oriented products such as gram and quarter gold rather than crafted pieces.

“Unfortunately, purchases slowed,” said Samet Özay of Özşahin Jewelry, adding that business began to weaken once gram gold surpassed 5,000 Turkish Liras.

“We kept telling ourselves it would improve next month, and then the next, but 2025 ended without a rebound.”

Sticker shock is reshaping preferences. Özay said gold rings now start around 15,000 liras, necklaces at 16,000–17,000 lira, and even the lightest bracelets near 30,000 liras.

“Sometimes even we’re surprised by these prices,” he said. “Customers would rather buy a quarter gold than spend 15,000 liras on a small necklace. When we can’t sell, workshops can’t produce.”