Gold rush at Turkish bazaar is a test of trust for lowly lira

Section:

By Ezgi Erkoyun and Jonathan Spicer
Reuters
Friday, August 14, 2020

ISTANBUL, Turkey -- Hasan Ayhan followed his wife's instructions last week and took their savings to buy gold at Istanbul's Grand Bazaar as Turks scooped up bullion worth $7 billion in a just a fortnight.

With memories of a currency crisis which rocked Turkey's economy only two years ago fresh in his mind, the retired police officer was among those playing it safe as he queued in the city's sprawling covered market, where a screen showed the gold price rise by one Turkish lira ($0.1366) in just 10 minutes.

... Dispatch continues below ...


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"I think it is the best investment right now so I converted my dollars to buy gold," the 57-year-old said, adding: "I might withdraw my lira and buy gold with it too, but I am scared to go to the bank right now because of coronavirus."

The day after Ayhan bought his gold on Aug 6, the lira hit a historic low and has remained skittish since, laying bare concerns that Turkey's reserves have been badly depleted by market interventions, which are showing signs of fizzling out.

Turks have traditionally used gold as savings and there may be as much as 5,000 tonnes of it "under mattresses," with more added after the recent buying spree, said Mehmet Ali Yildirimturk, deputy head of an Istanbul gold shops association.

Although bullion has never been more expensive, vendors at the Grand Bazaar said almost no one is coming to sell their gold jewellery. There are only buyers.

"I've been chatting with hundreds of people who are thinking about selling their cars or houses to invest in gold," said Gunay Gunes, whose busy booth is near the market's entrance. ...

... For the remainder of the report:

https://www.reuters.com/article/us-turkey-currency-gold-analysis/gold-ru...

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