Gold Black Market Forming In Turkey

While China and India are often mentioned as the most fervent gold bulls in the world, Turkey surpasses both of those nations in terms of demand per capita. As mentioned previously, Turkish gold coins are by far the most popular in the world over the past decade, backed by both investment uses as its widespread use as a gift for special occasions.

black market in gold

The recent price smash of gold came at a time when the wedding season was just around the corner, and people were already eager to get their hands on some precious metals.

Consumers looking to purchase gold coins at the Grand Bazaar where some 3000 shops are located were disappointed to hear of widespread shortages in physical gold coins. The Turkish state mint, known as Darphane, have admitted at being unable to keep up with the demand over the past few days as Turkish demand for gold has gone through the roof.

Last Monday and Tuesday alone, the Turkish mint reported orders over 8 tons. Just to put it in perspective, the whole reserves of Cyprus which was a big point of discussion recently, stood at around 13 tons.

The lack of supply has created something of a black market for gold in Turkey, as premiums for basic quarter coins were anywhere from 5-15%. Another downside to this chaos in the physical gold market has been the emergence of fake gold that has found its way to civilians’ hands. The fake gold, likely made out of Tungsten, has created confusion and uncertainty in the marketplace. The large gold refiners are placing special imprints on the packaging that can be seen in ultraviolet light to ensure purchasers can tell the real ones apart from the fake.

Jewellery shops and retailers around the country are expressing how slow the Turkish mint has been in its aim of restocking and fulfilling orders. In contrast, gold that is sold in grams does not suffer from shortages and can be gotten at fair prices.

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