Turkish gold imports seen recovering as prices slump
ISTANBUL - Reuters
Turkey’s gold trade hit record highs in 2012 and 2013 on booming business with Iran.Gold imports into Turkey, the world’s third-largest consumer of the precious metal, are expected to pick up in the coming months on the back of a slump in prices after sharp falls during much of the year, industry experts said Nov. 6.
Turkey’s gold trade hit record highs in 2012 and 2013 on booming business with Iran. Ankara was paying for Iranian oil and gas in Turkish Lira, which Iranians were then using to buy gold, helping Tehran to circumvent Western sanctions.
But Turkey’s gold trade has since dwindled, partly after Washington tightened sanctions to stop gold bought in Turkey from providing a financial lifeline to Iran.
Istanbul Gold Exchange data showed that Turkey’s gold imports fell by 71 percent year on year to 72.2 tons in the first 10 months of this year. Bullion imports to Turkey fell to 6.6 tons in October from 12.6 tons in September.
A surge in the dollar, in which gold is priced, has knocked the metal in recent days through key chart support at $1,180 an ounce - the lowest during last year’s 28 percent plunge - to its lowest since early 2010 at $1,137.40.
“We have already seen a pick up in gold demand as global prices fall,” Cumhur Taşdelen, director of the board of Troy Precious Metals in Istanbul, told Reuters. “There may be a jump in gold imports in November.”
Turkey itself produces only a small amount of gold, but not enough to meet demand, meaning that it must import the precious metal to be able to sell on to buyers such as Iran.
In Turkey, gold is also a traditional gift and seen as a safe-haven investment in the form of coins or jewelery. Many consumers buy when prices are low and sell their gold and jewelery when prices rise.
Traders said that Turkish imports could rise to 100-120 tons in 2014 as a whole, still down from 302 tons in 2013.