The dramatic rise in the price of precious metals has also taken hold in Istanbul’s Grand Bazaar, where gold and silver traders are experiencing unprecedented demand due to the massive influx of buyers looking for a safe investment in metals such as gold.
With the price of an ounce of gold (31.10 grams) above $5,000 and the price per gram of gold exceeding 7,000 Turkish liras (€135), consumers have turned to more affordable alternatives such as miniature gold pieces, as reported by Turkish media. Recently, there has been an increase in demand for 0.10 gram, 0.25 gram and 0.50 gram gold pieces, which according to current market conditions are selling for TL 1,550 (€30) for 0.10 gram gold pieces, TL 2,550 (€49) for 0.25 gram pieces, and TL 4,400 (€85) for 0.50 gram pieces.
And prices continue to rise. Gold prices are soaring: yesterday, 28 January, the price per gram rose by more than 200 Turkish liras (about € 4) in a single day, causing long queues in front of shops selling gold in grams and pure bullion. The rush in the Grand Bazaar shops was so intense that many jewellers reported running out of stock, and traders were forced to take measures such as allowing customers in one at a time to try to avoid crowds.
With geopolitical tensions rising, global demand for precious metals has increased, and Turkey is no stranger to this trend. Many Turks are turning to gold as a safe haven investment for the future. In Türkiye, gold in grammes sells for as much as 7,643 liras (almost €150) a piece, while the gold quarter coin has risen to 12,470 liras (€240).
Silver stocks depleted
But gold is not the only metal on the rise. The rush for silver is even greater. With financial giants such as Citigroup predicting that silver could reach $150 per ounce in just three months, demand has soared. In Istanbul’s Grand Bazaar, two out of three shops selling silver report that they are out of silver bullion.
“Before, families preferred to buy a single large piece of gold, but now they opt to buy several small pieces in grams with the same budget,” said a local jeweller. People on fixed incomes, in particular, choose to invest by buying smaller amounts in the face of high prices per gram of gold.
The other aforementioned phenomenon that has brought this ‘fever’ is that of mini-gram gold pieces, which were previously sold only on online platforms and are now seen more in the windows of large jewellery stores, in the face of growing demand. Industry representatives point out that these smaller pieces are especially in demand by young people with low incomes and by those making their first gold investment.
Turkish Central Bank’s gold reserves at record highs
Meanwhile, the sharp rebound in gold prices has helped the Turkish Central Bank‘s total reserves reach a record high for the second week in a row, according to official data released earlier today, increasing by more than $10.4 billion from the previous week to a record $215.6 billion in the week until 23 January.
However, while investors seem to be satisfied with the current high gold prices, experts insist on the need for caution in the face of this impulsive rush to invest in precious metals. Although gold’s uptrend looks set to continue in the medium to long term, price fluctuations and sudden short-term corrections are also likely. Therefore, good strategic planning, risk diversification and a long-term investment perspective are recommended when investing in gold, avoiding impulsive buying and selling.
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Edited and reviewed by:
Pablo Gómez is a specialist in Turkey and has been editor-in-chief of Hispanatolia since 2011. He has been analysing current affairs and geopolitics in Turkey and the surrounding region since 2006.
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