Page 39 - Bullion World Volume 4 Issue 10 October 2024

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Cultural Legacy and Economic Stability

Turkey’s gold market holds a significant position globally, driven by deep-rooted
cultural traditions and economic factors. The country ranks as the fifth-largest gold
market in the world, reflecting the crucial role gold plays in Turkish society, both in
terms of jewelry and investment. Historically, Turkey has seen consistent demand for
gold, influenced by its function as a hedge against inflation and currency depreciation.

Turkey’s gold demand is spread across various sectors, This trend has put pressure on Turkey’s trade balance,
with jewelry, bars, and coins making up the bulk of prompting government policies aimed at regulating
consumption. As of 2023, Turkey was the fourth-largest imports and mobilizing the 4,500 tonnes of gold
gold jewelry market globally, with demand averaging 35 estimated to be held in the domestic economy.
tonnes annually over the past five years. The country has
long regarded gold as a culturally significant commodity, Gold also plays a critical role in Turkey’s financial system.
used in weddings and religious ceremonies. Policies such as the Reserve Option Mechanism were
introduced to encourage the movement of privately
In recent years, Turkey has witnessed a surge in demand held gold into the financial system. Additionally, the
for gold, driven largely by the country's volatile economic Central Bank of Turkey has been one of the largest
environment. Spiralling inflation, a rapidly depreciating buyers of gold, adding 44 tonnes to its reserves in
lira, and heightened geopolitical tensions have prompted 2024, underscoring its reliance on gold to stabilize
Turkish consumers to seek the safety of gold. In 2024, the economy amidst growing economic challenges. In
demand for bars and coins surged by 50% compared summary, Turkey’s gold market exemplifies the intricate
to the previous quarter, reaching 44 tonnes in the first relationship between cultural heritage and economic
quarter alone. Despite a moderately sized gold mining strategy, positioning the country as a major player in
industry, producing 36 tonnes of gold in 2023, Turkey's global gold demand while navigating its own domestic
domestic production cannot meet its high demand. economic challenges.

Consequently, gold imports have soared, totalling 683 Source - https://www.gold.org/goldhub/research/
tonnes in 2023, the highest level since at least 2012. market-update/perspectives-on-the-turkish-gold-market

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