Turkey: rising demand for gold due to the Middle East

“Turkey has a cherished tradition of giving gold to newlyweds, and as summer weddings approach, demand for the precious metal is skyrocketing,” Mutlu told China's Xinhua News Agency.

In Kuyumcukent, a district of Istanbul known as the center of Turkey's jewelry industry, long lines have formed outside gold stores amid fears that tensions between Israel and Iran could spill over into the region.

After Iranian missile and drone attacks on Israel on April 13, Riza Gokay Tuğsavrol, owner of the jewelry store Harem Gold, said the continued rise in prices due to increased demand has made gold an even more attractive commodity.

“In times of chaos and geopolitical turmoil, such as wars, investors often view gold as a ‘safe haven’ and rely on it as a stable asset,” he explained. “Before the conflict, one gram of gold hovered around the 2,500 Turkish lira (US$76.75) mark [...] After the conflict escalated, the price rose to 2,630 lira and even started to test the 2,650 lira mark.” For comparison, at the beginning of the current 2024, one gram of gold in Turkey cost about 2000 liras.

Murat Tufan, an analyst at Ekoturk, confirmed Tugsavrol's view that rising prices and escalating gold frenzy underscore the increased geopolitical risks in global foreign policy. “The fear index has begun to exert its influence, especially after Iran's retaliation against Israel,” Tufan said. “This rise indicates that investors in financial markets are becoming increasingly fearful as they fear a further escalation of the conflict between Israel and Iran.”

As the demand for gold among Turks continues to rise, Abdullah Yasir Sahin, head of Turkey's State Mint, has warned citizens and businessmen not to buy fake gold from small workshops, especially at a time when the country's gold production is struggling to meet the frenzied demand.