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Turkey's Latest Gold Rush

When a foreigner is asked to a wedding in Turkey, they frequently begin to ponder what to offer as a present because there is no wedding list to help them and no account number on the invitation for deposits. And, when they learn the solution, they are frequently astounded: gold. In Turkey, the precious metal is given at weddings, births, and circumcisions. And now, turkey's latest gold rush is happening!

Aug 29, 202342K Shares600.6K ViewsWritten By: Johnny K.Reviewed By: Luke Williams
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When a foreigner is asked to a wedding in Turkey, they frequently begin to ponder what to offer as a present because there is no wedding list to help them and no account number on the invitation for deposits.

And, when they learn the solution, they are frequently astounded: gold. In Turkey, the precious metal is given at weddings, births, and circumcisions. And now, Turkey's latest gold rushis happening!

Depending on the guests' proximity to the celebration, a ceyrek or quarter coin (1.75 grams of 22-karat gold worth about 100 euros), a yarm (twice the value), a tam (four times the value), or bracelets, necklaces, and other gold jewelrycan be given as a gift.

As a result, a newlywed couple can get between 200 and 500 grams of gold to start their new life together.

The woman is normally in charge of the gold. In a country where women's labor-force participation is low, this tradition allows them to maintain some financial independence, particularly in the event of a divorce: in the event of divorce, all jewelry given during the wedding and half of the gold acquired during the marriage belongs to them.

In reality, there is another gold-related tradition: "The days of gold," in which a group of friends or neighbors alternately assemble at the home of one of them, who invites them to eat and receives a gold coin from each of the guests.

These sessions are held monthly, beginning at the home of the person with the most pressing financial need, making this practice a type of loan to fulfill urgent costs.

And the truth is that these small gold coins are simple to obtain: they can be found in any jewelry store or several exchange houses. They can also be purchased.

That is where they are useful: gold is a means of conserving against the constant depreciation of the Turkish lira, as well as a readily liquid asset.

That is why, when the lira begins to lose value and inflation becomes widespread, long lines of Turks form in Istanbul's Grand Bazaar, ready to safeguard themselves against devaluation by purchasing these coins.

"When people have financial problems, they solve them this way, selling the coins and getting cash," explains Adem Kurtulmus, a jeweler at the ancient market.

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Gold bars at the table
Gold bars at the table

This approach plainly necessitates the importation of massive amounts of raw gold. Turkey bought $20 billion of this precious metal last year. It has already surpassed $19 billion in the first seven months of this year, prompting the government to implement import curbs. Gold is a major contributor to Turkey's persistent trade deficit.

Another major issue is that this gold winds up in safes, drawers, or under mattresses, outside of financial circuits, and hence impossible to calculate statistically.

That is why, at the government's request, Turkish banks have been promoting their own "gold days" for years, in which they receive jewelry and gold coins and deposit them in an account from which the savings can later be withdrawn in cash or in certified gold coins.

However, analysts think that 90% of the gold owned by Turkish women has yet to be discovered, with the value exceeding $200 billion (almost a fourth of GDP) according to some estimations.

Perhaps this is one of the explanations for how civilization survives such severe crises: there is a modest buffer of gold at the bottom of it all.

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