ECONOMY

Turkey sees strong demand for gold

ISTANBUL (Reuters) – Turkish gold imports climbed 45.4 percent year-on-year in May to 33.48 tons, the Istanbul Gold Exchange announced yesterday. Dealers attributed the rise to coin demand. Gold imports were 14.2 tons in April and 12.2 tons in March. Gold prices hit a 26-year high on May 12, which boosted Turkish consumers’ appetite for coins, said Alper Kalyoncu, a gold dealer at Garanti Bank. «As gold rose to $730 an ounce there was extreme demand from consumers. The lira was not as weak as today, which made the price of gold cheaper in lira terms,» Kalyoncu told Reuters. Dollar weakness and geopolitical concerns have prompted investors to move money back into gold, a traditional haven during times of trouble. This year gold prices, buoyed by inflation concerns and investment fund interest, have soared more than 40 percent to their highest level in 26 years. However, from their May 12 high of $730 a troy ounce, gold prices have slid back to trade at $635 yesterday. The Turkish lira lost 15 percent of its value against the dollar in May, hit by Turkish political and economic concerns and a global shrinking of appetite for risky assets in emerging markets. Kalyoncu said wholesalers and producers were still putting off their orders since the price swings were making it difficult to predict the outlook. Gold imports in the first five months fell 34.8 percent year-on-year to 83.89 tons. Turkey, known as one of the world’s top gold consumers, imported a record 270 tons of gold bullion in 2005. Analysts see imports below that level this year.