Although demand for gold jewelry in Turkey increased in the first quarter of 2008 by 24 percent based on dollar rate, it was still 25 percent lower compared to the same period last year.
Besides, there was a drop of 13 percent in demand in terms of weight reaching 28.9 tons largely due to high price of the precious metal.
The rising demand for gold in Turkey actually indicates that companies producing in the region will have a domestic market that is ready to consume their metal. Besides, on an international level it just implies a bullish market for investors.
However, gold prices showed a surprisingly dissimilar trend in March this year, when record high gold prices kept Turkish imports for the metal in doldrums bringing the monthly total to the lowest ever registered so far.
Gold imports sharply fell down by 95 percent both on a monthly and yearly basis to 675 kilogram in March and this was mainly due to high level of scrap gold returning to the market and causing over supply in the domestic market.
Turkish gold imports increased by nearly 40 tons last year to 230.796 tons, valuing US $5.7 billion at $700 an ounce. This surge represented a 19.8 percent rise over 2006.
Turkey, one of the top five buyers in the world of gold bullion, processes over half of its gold imports into jewelry for exporting it to various countries. In 2007, the country exported roughly 148 tons of processed gold, worth $3.7 billion.
For this year, the country aims to process 200 tons of gold for export. This will require at least another 22.5 percent increase in Turkish gold imports. Fortunately for the country, the Turkish lira is doing quite well against the US dollar.
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