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Turks Seek Gold More Than Liras in Response to Erdogan’s Call

  • Nation’s residents sold net $451m after campaign to boost lira
  • Locals also increased precious metal holdings by $700 million
An employee holds a two hundred and fifty gram gold bar in this arranged photograph at Solar Capital Gold Zrt. in Budapest, Hungary, on Thursday, March 10, 2016. Gold advanced to the highest level in a year after the European Central Bank indicated it wouldn't cut interest rates further, boosting the euro and making dollar-denominated bullion less expensive for investors.
Photographer: Akos Stiller/Bloomberg

Asked by their President Recep Tayyip Erdogan to shun the dollar, Turks are favoring gold over liras.

On the face of it, the appeal to defend the Turkish currency worked. It arrested the biggest three-week surge in foreign-currency deposits since August as Turks drew down a net $450 million from these accounts in the week ended Dec. 9. But residents also boosted their precious metal holdings, traditionally denominated in dollars, by $700 million, a hint that confidence in their currency remains tenuous, according to Nomura Inc.