Gold imports surge as Turks heed Erdoğan’s call and vote looms

ISTANBUL - Reuters

Turkish gold imports rose 17-fold to 28.2 tons in March, as citizens looking to hedge currency risk ahead of a referendum followed President Recep Tayyip Erdoğan’s calls to buy gold instead of dollars.

A sharp rise in gold demand from Syria and Iraq also hiked Turkey’s gold imports, according to experts. 
After the sharpest falls in the Turkish Lira since the 2008 financial crisis last November, Erdoğan called on Turks to sell dollars and buy lira or gold to prop up the local currency. Gold imports have been rising year-on-year ever since.

“People have started opting for gold rather than foreign currencies,” said Mehmet Ali Yıldırımtürk, a gold specialist in Istanbul’s Grand Bazaar, adding that a moderate recovery in the lira had also made gold more affordable again.

He also noted the sector has been importing gold in high volume to prepare themselves for the summer months, when the demand for gold increases. 

“Another reason for the rise in gold imports was the skyrocketing demand for 21 karat gold jewelry from Iraq and Syria amid geopolitical tensions and security concerns,” Yıldırımtürk added. 

Gold imports to Turkey rose almost eightfold to 36.7 tons in December 2016 after Erdoğan’s calls, their highest monthly level in just over two years, according to data from the Precious Mines and Metals Markets of the Istanbul bourse. 

Prices in Turkey surged from 132 liras ($36) for 24-carat gold in January to 153 liras in February. On April 4, gold prices were around 148 liras.

Gold is seen as a safe place to park assets during times of uncertainty, and Turkey is holding a key referendum on April 16 on whether to shift to an executive presidential system.