Gold news always intrigues us. Because yellow metal really has a special place in our society. It’s not just an ornament. It’s also a safe haven in tough times. That’s why we love gold anyway. For this reason, the gold movement in Turkey can be news even in the world. The latest news is Kitco analyst Anna Golubova.
Golubova questions why Turkey sold 100 tons of gold in March and April. Let’s take a look at their views together. As Cryptokoin.com, as we have mentioned before, in 2022, Turkey bought more gold than any other central bank. However, according to Golubova, Turkey went on a selling spree, unloading 81 tons of gold in April and 15 tons in March.
Why is gold sold so much?
Analysts point to increased domestic demand and limited gold imports as the reasons for this new trend. Krishan Gopaul, senior analyst at the World Gold Council (WGC), draws on data from the Central Bank of Turkey. Speaking according to the data, Gopaul states that the official gold reserves of the country decreased by 80.8 tons to 491.2 tons in April. “Precious metal is on sale domestically to meet local demand,” Gopaul said in a Twitter post. In addition, the central bank’s foreign exchange reserves decreased by 15% from the end of March to May 12, according to the news of the Financial Times, which is based on the data of the central bank. This decrease indicates a decrease of 9.5 billion dollars.
This situation points to a situation that occurred in the weeks before the general elections in Turkey. In those days, President Recep Tayyip Erdoğan was working to support the economy and the local currency before the elections. The yellow metal sale came at a time when Turkey’s Central Bank sought protection against uncontrolled inflation. In 2022, it had bought more gold than any central bank. Turkey’s official gold reserves increased by 148 tons last year to 542 tons. This figure marks the highest level in history.
Increase in yellow metal demand
Turkey’s domestic market also saw an increase in gold demand last year, as citizens adopted the precious metal as a precaution against inflation and the devaluation of the local currency. At one point in 2022, inflation was hovering above 85%. Increasing demand for yellow metal triggered the jump in gold imports. It started to suppress Turkey’s current account deficit, which reached record levels in January. In February, Turkey took steps to curb rising precious metal imports to improve its deficit situation. Turkey’s Central Bank said the country’s current account deficit fell to $4.5 billion in March. However, limiting gold imports does not suppress the increasing domestic demand. Therefore, the country’s central bank decided to sell its gold reserves to meet the demand.
William Stack, financial advisor of Stack Financial Services LLC, made a statement on the subject. Stack said, “The demand for yellow metal in Turkey is simply a desire to hedge against the declining purchasing power of the lira. Gold is a great asset to have when you’re in financial trouble. Because it can be sold when needed.” says. However, Stack points out that the move to dump some of the gold for local consumers would not be a loss for the Turkish central bank. The emphasis at this point is as follows:
“One of the reasons for Turkey’s sales is the 10% increase in gold in dollar terms compared to a year ago. In lira terms, the increase is more dramatic – 70-85%. If Türkiye sells gold internationally, this will further weaken the lira. But since they sell gold to those living in Turkey for Lira, this helps strengthen the money.”
Stack added that selling yellow metal reserves to local consumers limits citizens’ ability to purchase foreign currency. According to him, this puts more control over the value of the lira to the central government. Thus, the lira is less affected by currency speculators.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram And YouTube join our channel!
Risk Disclosure: The articles and articles on Kriptokoin.com do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies. You can lose some or all of your money by investing in Bitcoin and cryptocurrencies. Remember that your transfers and transactions are at your own risk and any losses that may occur are your responsibility. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Disclaimer: Advertisements on Kriptokoin.com are carried out through third-party advertising channels. In addition, Kriptokoin.com also includes sponsored articles and press releases on its site. For this reason, advertising links directed from Kriptokoin.com are on the site completely independent of Kriptokoin.com’s approval, and visits and pop-ups directed by advertising links are the responsibility of the user. The advertisements on Kriptokoin.com and the pages directed by the links in the sponsored articles do not bind Kriptokoin.com in any way.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.