ECONOMY

Turkey gold demand may revive on dollar, weddings

LONDON (Reuters) – Gold bullion demand may be set to recover in Turkey after last year’s steep fall, as the dollar remains weak and as the wedding season triggers buying. Gold imports fell sharply in 2006 due to high and volatile world prices, and were down by 2 percent in the first four months of this year, but the industry sees scope for a rally. «When the dollar is weak, we see rising demand for bullion in the domestic market since it is cheaper for lira holders,» broker Demet Rona of Rona Doviz, a member of Gold Bourse, said. «Also market players in the Grand Bazaar prefer to invest in gold at times like this,» she said. The dollar, which fell to a record low of $1.3683 against the euro last week, has shed almost 10 percent against the lira since early March. However, recent political tensions between the army and the government over a presidential vote might weigh on consumer sentiment. «So far, we haven’t seen panic among investors, but if the uncertainty persists, people might want to put their money into the dollar,» dealer Alper Kalyoncu at Garanti Bankasi said. The lira recovered on Wednesday after a fall to below 1.38 earlier in the week as the government’s call for early elections eased tensions. «If we had seen the dollar rising above 1.40 lira, I guess we would see some selling in gold,» Kalyoncu said. Wedding boost Traders and jewelers say the wedding season will also help demand recover but total 2007 imports are unlikely to exceed last year’s 192 tons, which represented a fall of almost 30 percent. «April-May is the period when producers buy bullion to prepare products for the wedding season, so we will see demand rising,» dealer Gokhan Aksu at Goldas said. Gold coins and jewelry are traditional gifts at Turkish weddings. «Bullion imports at the end of this year will probably be pretty much the same as last year,» Kalyoncu said.