Turkey Gold Imports Slide to 10-Month Low as Local Prices Surge

Turkey’s highest gold price in more than three years is cutting appetite for the metal in the fourth-biggest buyer.

The country imported 1.65 metric tons of bullion in May, 21 percent less than a month earlier and the least since July, the Istanbul Gold Exchange’s website showed on Tuesday. Turkish first-quarter consumer demand for bullion slid 42 percent from a year earlier, according to World Gold Council data.

Local prices rallied 21 percent in the past year as the lira weakened against the dollar. The currency’s slump is the second-biggest in emerging markets this year on concern government gridlock will prevent legislation needed to bolster the economy. Turkey will hold national elections on June 7 and polls suggest a coalition government will be elected.

“A decline in the Turkish lira has made it more expensive for people to buy gold,” Cagdas Kucukemiroglu, a consultant for researcher Metals Focus Ltd., said by phone from Istanbul on Tuesday. “This is the continuation of a trend, we have seen weak demand in the first quarter and we expected it to carry through to the second quarter.”

The nation’s gold imports so far this year are down 60 percent from 2014 to the lowest since the first five months of 2010.

Turkey was the fourth-biggest consumer of gold last year, buying 116.6 tons, the London-based World Gold Council said in a May report. Demand totaled 15.6 tons in the three months through March, down from 35.3 tons in the previous quarter and 27 tons a year earlier.

Gold Prices

Gold climbed to 3,271.79 lira an ounce in April, the highest since September 2011, and was at 3,186.38 lira on Tuesday. In dollars, it’s little changed this year at $1,187.10 an ounce, according to Bloomberg generic pricing.

In April, Turkey’s gold exports rose more than 27-fold to $1.43 billion, according to state statistics office data. About 80 percent of gold shipments went to Switzerland with the United Arab Emirates accounting for a majority of the rest.

There are signs that physical demand is waning elsewhere. The U.S. Mint sold 21,500 ounces of American Eagle gold coins last month, the least since February. Trading volume in May for the benchmark spot contract on China’s Shanghai Gold Exchange was about 28 percent less than in March, bourse data show.

Turkey’s silver imports declined for a second month after reaching the highest on record in March. Inbound shipments slipped 57 percent to 13.5 tons, the lowest since September, the data showed.

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