Panic” Gold Buying in Turkey is a Typical Reaction to a Collapsing Currency
This is an article that 1st American Reserve finds important for its clients to know about. Gold has been rising when the dollar falls and falling a bit when it rises, but when the dollar begins to fall farther and faster, you can expect a strong rush to gold, 
as has been happening in Turkey and – to a lesser extent – in countries like Russia and Argentina, where their currency is chronically weak. The Wall Street Journal wrote about this last week in an article entitled, “In Turkey, Weak Lira Powers Fresh Gold Rush: Turkish households bought record volumes of gold this summer – and safe boxes to keep it at home.”
The Journal describes long lines in front of gold outlets since June. “I’ve been at the Bazaar for 20 years and I never experienced that,” said Ozgur Anik, general manager of Ozak Precious Metals. “When gold prices are at record highs, people normally sell their gold. This time, they kept buying more.” The average daily volume of gold sold at the Bazaar shot up 10-fold, to 4,500 pounds from 450 pounds, Mr. Anik said.
Gold is a form of long-term savings in Turkey and most people keep their gold savings at home, but some are now buying gold as a speculation. “I’ve been chatting with hundreds of people who are thinking about selling their cars or houses to invest in gold,” said Gunay Gunes, operator of a busy gold booth in the Bazaar. Due to rising demand, Turkey has had to import more gold this summer. From January to August, Turkey imported $15 billion in gold, up 153% from a year ago, according to the Turkish Trade Ministry.
With negative interest rates throughout the world and collapsing currencies, you can expect this gold-buying mania in Turkey to be repeated throughout more countries.
Trackbacks
No Trackbacks
Comments
Display comments as Linear | Threaded