Why Did Turkish Gold Imports Skyrocket?

April 6th, 2017 by

In tracking major trends in the global gold trade (i.e. large-volume sales), there are two (sometimes related) factors that tend to provide the clearest macro picture: central bank net purchases and raw domestic import number for various countries.

Occasionally, there are enigmas within this data due to the nature of the supply chain for the world’s gold. For instance, Bloomberg’s Eddie van der Walt reports that last year Switzerland contributed about a third of China’s gold imports—unsurprising because Swiss companies refine a great deal of the world’s annual supply of gold. However, the country also imported over 500 tonnes of gold from the U.K. in 2016, according to Koos Jansen of BullionStar. Similarly, the month-to-month pace of these large international gold trades is volatile, and is often concentrated in a narrow slice of the calendar.

The general trend of large purchases by central banks adding gold to their strategic reserves is focused in China and Russia, who are consistent and persistent buyers. For instance, the Chinese imported an impressive 1,300 metric tonnes of gold in 2016. Other national banks for the most part buy and sell their gold less frequently and in smaller amounts.

In the other primary case where it’s possible to track the flow of hundreds of tonnes of gold changing hands, gold demand from consumers and private businesses drives up a country’s gold imports. This is no better exemplified than in India, where most years the volume of gold coming into the country approaches (or exceeds) 1,000 tonnes.

Turkey Gold Imports Spike

It is this second category with India where Turkey more appropriately fits. While worries over the Brexit vote for Britain to break with the European Union had a noticeable effect on gold leaving London or Switzerland in 2016, other geopolitical circumstances appear to have sparked the flow of gold into Turkey. As Reuters notes, “Gold is seen as a safe place to park assets during times of uncertainty.”


After a failed military coup last year, Turkey holds a referendum later this month on changes to its century-old constitution that is seen by many as an opportunity for President Erdoğan to consolidate more power.

As a strong indicator of Turkish investors showing more safe-haven demand for gold, gold imports jumped nearly 700% in December to over 36 tonnes after Erdoğan made overtures about investing in gold rather than dollars. On an annual basis, Turkey is already the world’s fourth-largest gold consumer, at about 180 tonnes per year on average over the last decade. It in no small measure functions as a “gateway” for gold to be traded across the Middle East. The World Gold Council (WGC) estimates that Turkish citizens privately hold at least 3,500 tonnes of gold in the form of jewelry, coins, and bars.

The gold-buying frenzy has continued as we approach the referendum. Year-on-year, March’s gold import totals were an incredible 1,479% higher. Over 56 tonnes were imported during the first quarter of 2017.


The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.