ECONOMY

Turkey sees much demand for gold in troubled times

LONDON – Ongoing uncertainty in the Middle East has boosted demand for gold coins in Turkey this year and the world’s sixth-largest jewelry fabricator has also increased its jewelry exports, analysts and officials said. «In the first six months of this year, the (Turkish) coin market has consumed nearly 30 tons of fine gold, compared with 17.5 tons at the same time last year. That is a big jump,» Philip Newman, metals analyst with London-based Goldfields Mineral Service told Reuters. He said most of the demand for coins had come from investment buying linked to the war in Iraq, although not all of it was domestic consumption, with neighboring countries also investing in gold coins – a traditional safe haven in times of trouble. Verdat Ozdan, deputy chief of the Istanbul Gold Exchange said: «People in the Middle East, as well as in Turkey, hold onto excess gold for security… I believe gold is in high demand in Syria and Iran, and some of this demand is being met here.» The World Gold Council’s (WGC) Turkey general manager Murat Akman told Reuters in a recent interview the country was set to surpass last year’s performance in gold imports, exports and jewelry manufacturing. «My estimate is 2003 will be a new record for gold imports, exports and other areas if conditions remain normal,» he said. One of the world’s largest consumers of gold, Turkey imported 99.7 tons during January-June 2003, up 70 percent on the first half of 2002, according to figures from the Istanbul Gold Bourse (IAB) and Turkey’s central bank. Gold imports in June alone reached just over 22 tons, compared with just 6.3 tons in June 2002. Turkey was expected to import 200 tons of gold in 2003, the highest since 2000, IAB deputy chief Vedat Ozdan told Reuters. WGC’s Akman said exports were expected to spike again in 2003, rising toward year-end. He estimated gold exports would reach 126 tons by the end of the year, the highest since 1991, with jewelry accounting for 60 tons. Last year exports rose to 116 tons from 105 tons in 2001. Exports of Turkish jewelry have grown strongly since the liberalization of currency and precious metals markets in 1993, and has been the fastest growing sector over the last 10 years. The US imports the lion’s share of Turkish jewelry, accounting for more than 35 percent of production in 2001.