Turkish gold imports increased nearly 40 tonnes last year to 230.796 tonnes, worth $5.7 billion at $700 an ounce. This surge represents a 19.8% increase over 2006 and is the largest recorded annual gain in gold imports to Turkey since the Istanbul Gold Exchange began keeping track of the data in 1995.
The most recent annual import figures from the Istanbul Gold Exchange can be seen below:
Turkish consumers strongly bought gold bullion in 2007 despite the huge rally in gold prices during the year, which moved the metal nearly 32% higher by the end of the year.
Turkey, one of the world’s top five buyers of gold bullion, processes over half of it’s imported gold-mostly into jewelry for exportation. In 2007, the country exported roughly 148 tons of processed gold, worth $3.7 billion.
Turkish Gold Jewelry
Turkey’s gold jewelry sector has grown significantly over the last 20 years. In the early 1990s, the sector employed about 100,000 people. The industry now employs about 350,000 people, with small enterprises leading the industry, and provides significant contributions to the Turkish economy, such as a high added value, jobs, and tax revenue.
Below are some examples of Turkish gold jewelry from designer Yossi Harari:
Turkey’s jewelry sector has an annual processing capacity of 400 tons of gold and 300 tons of silver. The economic value of this capacity is approximately $10 billion.
For 2008, Turkey aims to process 200 tons of gold for export. This will require at least another 22.5% increase in Turkish gold imports. Fortunately for the country, the Turkish lira is doing quite well against the US dollar.
Turkish Lira vs. US Dollar
The Turkish lira rose more than 20% against the US dollar last year and has firmed to its highest level in more than six years. The lira is backed by some of the highest interest rates in emerging markets, and the prospect of lower rates in the United States tends to lure more cash into high-yielding markets.
Turkish consumers are expected to continue to purchase gold bullion despite record highs in part due to the rise in the value of the lira against the US dollar.
Gold in Turkey
Turkey’s first modern gold mine, at Ovacik in eastern Turkey, poured its first gold in May 2001 after more than ten years of exploration, construction, and environmental permitting by Normandy Mining and its predecessors. The operation is now 100%-owned by Newmont Mining and utilizes a 300,000 tonne per year capacity mill and a gold recovery plant.
A number of other international companies are actively exploring the country for gold resources including:
- Aldridge Minerals (TSX-V: AGM)
- Anatolia Minerals Development (TSX: ANO)
- Ariana Resources (AIM: AAU)
- Chesser Resources (ASX: CHZ)
- Cloudbreak Resources (TSX-V: CDB)
- Eldorado Gold (AMEX: EGO, TSX: ELD)
- Eurasian Minerals (TSX-V: EMX)
- Fronteer Development (AMEX: FRG, TSX: FRG)
- Kefi Minerals (AIM: KEFI)
- Mediterranean Resources (TSX: MNR)
- Odyssey Resources (TSX-V: ODX)
- Stratex International (AIM: STI)
Turkey has estimated gold resources of over 500 tonnes, or 17.6 million ounces, identified in nine major deposits.
The rising demand for gold in Turkey means that companies producing in the region will have an domestic market eager to buy their metal. On a global scale, Turkey’s increase in gold imports means a tighter gold supply, a general bullish sentiment for us as investors.
Until next time,
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