Local jewelers confused over Iranian gold imports

ISTANBUL

In July alone Turkey exported $1.83 billion worth gold to Iran. AFP photo

Turkish gold sector representatives are still unsure about where a large amount of gold exports to Iran, some $1.83 billion in July alone, have gone as they discuss the idea that Iranians may increasingly be preferring to keep their savings in gold.

 Turkey’s gold exports to Iran totaled $4.4 billion in the first half of the year.

There were no clear reasons for this new trend in the country other than the fact Iran is facing an inflation pressure and people may see gold as a safe haven, said Allattin Kameroğlu, head of the Istanbul Chamber of Jewelry (İKO), in a phone interview with the Hürriyet Daily News yesterday.
The chamber head is also not sure whether it is independent investors buying Turkish gold or the Iranian central bank using middlemen.

The local jewelers are far from benefiting from this emerging trade as a large portion of the trade is in bullions, said Kameroğlu said.

Turkey buys scrap gold

Ayhan Güner, head of the Istanbul Precious Minerals and Jewelry Exporters’ Association, agrees that Iran’s gold purchases have no direct affect on the local market, as Turkey is a buyer of scrap gold and this trade causes no shortage in supply.

Along with the U.S., Switzerland, India and Italy, Turkey is one of the leading gold refiners in the world with three facilities in international standards in Istanbul, he said.

Iranian gold imports are also stemming from Istanbul.

Both state institutes and individual investors from Iran are buying Turkish gold, Güner said.
The Iranian state might be contracting debt to citizens in gold.

Iran is converting its assets into gold because of risks of war and developments in the Middle East, Hürriyet’s website quoted economist Uğur Gürses as saying yesterday. In case of war Iran can only import goods on gold, he said.

The country is already facing money transaction difficulties because of the continuing Western sanctions.

“They are raising their [gold] stocks,” Gürses said. “As we are their border neighbor, they are doing this through Turkey.”

Turkish gold prices have been rising since the start of the month, one gram of 24 carat gold is now valued at 97 Turkish liras on Aug. 31, up from 92 liras seen the first day of the month.

This is rather tied to global fluctuations, Kameroğlu said.

Gold little changed

Gold was little changed on Aug. 31, holding near a four-and-a-half month high hit earlier that week on hopes the U.S. Federal Reserve Chairman Ben Bernanke would hint at more measures to stimulate the economy at a central bankers meeting. Bullion was headed for an almost 3 percent gain this month, its third straight month of gains. Spot gold was also little changed at $1,655.40 an ounce, within sight of the four-and-a-half month high of $1,676.45.

Global prices determine the gold market in Turkey as the local production is too small when compared with the gold giant, said Güner said. “Turkey buys only 100 tons of scrap gold in a good year. The local gold extraction is at 25 tons. India buys 1,000 tons.”