Turkey Exports “Massive Quantities Of Gold” To Iran And Arab Spring Nations

Tyler Durden's picture

From GoldCore

Turkey Exports “Massive Quantities Of Gold” to Iran and Arab Spring Nations

Gold’s London AM fix this morning was USD 1,627.00, EUR 1,250.77, and GBP 1,008.99 per ounce. Friday's AM fix was USD 1,629.50, EUR 1,240.20 and GBP 1,007.54 per ounce.

Silver is trading at $29.74/oz, €22.91/oz and £18.47/oz. Platinum is trading at $1,525.50/oz, palladium at $635.40/oz and rhodium at $1,350/oz.

Gold fell $3.70 or 0.23% in New York yesterday and closed at $1,638.70/oz. Gold started out sideways in Asia then gradually dropped lower and this weakness continued in early European trading.


Cross Currency Table – (Bloomberg)

Gold edged lower on Tuesday despite the weaker euro and stock markets after furious citizens in Greece and France voted against austerity measures.  Gold prices are being supported by bargain hunters who continue to buy dips around the lower end of the metal's recent range between $1,620/oz and $1,680/oz.

The elections in France and Greece create added political uncertainty to an already extremely uncertain financial and political situation and this is likely to weigh on the euro. 

Euro gold remains firm around the EUR 1,250/oz level where it has been consolidating since mid March – in a range between €1,228/oz and €1,276/oz.

Gold has been trading between $1,620 and $1,680 for about a month. It is supported by the very uncertain macroeconomic and monetary environment but recent price weakness has made some buyers – especially more speculative buyers in western markets hesitant.

Gold’s long term trend towards higher prices remains intact (see Sharelynx chart below). 

Gold’s support is coming from store of wealth buyers including central banks and the increasingly important Middle East and Far East Asian and Chinese buyers.

Mainland China’s gold imports from Hong Kong surged a huge six fold in the first quarter when prices were between $1,550/oz and $1,800/oz and this demand is supportive of prices at these levels. 

China is set to displace India as the world’s largest consumer of gold in the coming months.

Imports from Hong Kong were 135,529 kilograms (135.53 metric tons) between January and March, from 19,729 kilograms in the year-earlier period. Hong Kong's gold exports to China in March increased about 59% on the month to the 3rd highest level on record, and the gold flow from China surged to its highest in the last 2 years.  

The lack of enthusiasm for bullion amongst western buyers in recent weeks may be beginning to change as there has been an increase in demand in recent days due to growing concerns about Spain and the risk of contagion in the Eurozone. 


Gold 1 Year Chart – (Bloomberg)

Deepening political uncertainty in the eurozone is also leading to a slight uptick in demand.

U.S. mint gold coin sales show how demand for bullion is picking up. The U.S. Mint’s sales of American Eagle gold coins rose 12% to 22,500 ounces so far in May, compared with 20,000 for all of April.

Gold imports by India could rise again on a backlog of demand from jewellers after the federal government decided to scrap an excise duty on jewellery it imposed in March 2012.

Turkey Exports “Massive Quantities Of Gold” to Iran & Arab Spring Countries

Iranians and Arab Spring countries are buying “massive quantities of gold” in order to protect their wealth from political instability and depreciating currencies.

Iran boosted imports of gold, jewelry and precious metals from Turkey by 3,692% from $13 million in March a year ago to $480 million in March 2012, according to the statistics agency in Ankara April 30 - as reported by Bloomberg.

The gold market was the biggest contributor to a $4.3 billion improvement in Turkey’s trade balance this year. That has aided Turkey and sent Turkish yields on benchmark two year notes 155 basis points lower this year. This is the biggest drop among major developing nations.


Sharelynx.com

While Turkey has assured the U.S. government it will cut purchases of oil from Iran by 20% this year, its total trade with the Islamic Republic increased 47% to $4.8 billion in the first quarter from a year earlier.

Sanctions aimed at isolating Iran because of its nuclear program, combined with revolutions in the Middle East, have spurred a tripling in the region’s purchases of Turkish precious metals and jewels to $942 million in the first three months, from $282 million in the same period last year.

This 30% increase in demand is contributing to gold remaining above $1,600/oz in what has all the hallmarks of another period of consolidation prior to higher prices.

“Turkey is exporting massive quantities of gold to Iran and Arab Spring countries as citizens in those countries switch to portable wealth,” Mert Yildiz, chief economist for Turkey at Renaissance Capital, told Bloomberg on April 30. 

The increase in trade with Iran comes as sanctions make it harder for trading partners such as Turkey, India and China to pay in dollars and euros.

Iran said in February it would accept payment in any local currency or gold.

Reuters report today that Iran is accepting payments in yuan for some of the crude oil it supplies to China, the Iranian ambassador to the United Arab Emirates said on Tuesday. "Yes, that is correct," Mohammed Reza Fayyaz told Reuters when asked to comment on an earlier report in The Financial Times.

The newspaper cited unidentified industry executives in Beijing as saying most of the oil that goes from Iran to China is handled by the Unipec trading arm of Sinopec China's second-largest oil company, and through another trading company called Zhuhai Zhenrong.

Fayyaz also confirmed that Iran was spending the currency on goods and services imported from China.

Currency wars recently escalated when Iran’s central bank and more than 20 other Iranian banks were expelled from the Society for Worldwide Interbank Financial Telecommunication, known as Swift, in March.

It is now almost impossible for Iran to complete large international fund transfers and this was regarded as a form of economic warfare.

The Iranian currency has plunged by over 30% in just over 6 months - to 17,300 rials to the dollar from 13,200 on Nov. 2. The central bank said inflation was 21.5% in the Iranian year that ended March 19.

Representatives from the U.S., Russia, China, the U.K., France and Germany last month held their first international meeting with Iran on its nuclear program in 15 months. They agreed to resume the negotiations in Baghdad on May 23, following “constructive” talks in Istanbul, Catherine Ashton, the EU’s foreign policy chief, said April 14.

While Turkey has agreed to cut oil imports from Iran, its officials have said they aren’t bound to abide by broader sanctions imposed by the U.S. and European Union, which are stricter than those from the United Nations.

The economic cost of sanctions is “borne by Turkey,” not just by Iran, Economy Minister Zafer Caglayan recently said.

A spokeswoman for the U.S. Embassy in Ankara who declined to be identified, said discussions with Turkey were continuing.

Turkey imports almost all of its energy, and every $10 a barrel increase in the price of oil adds about $4 billion to Turkey’s import bill.

Iran supplies about 40% of Turkey’s oil, making it the largest single source for the fuel, according to the Energy Ministry. The country pays about $6 a barrel less for Iranian oil than Brent crude, according to a Goldman Sachs Group Inc. report in March.

The narrowing in Turkey’s current-account gap has helped buoy the lira, with the currency appreciating 7.3% against the dollar this year following an 18 percent slump in 2011, the biggest drop worldwide.

Turkey has been a net exporter of more than $1 billion of gold, jewelry and precious metals so far this year after importing a net $411 million in the same period last year, according to official statistics. Turks give gold as gifts for events from births to weddings, and have traditionally used the metal as a store of value against yearly inflation that was more than 70% as recently as a decade ago.

Turks are believed to have a massive 5,000 tons of gold “stashed under their pillows.” So estimated Ozcan Halac, head of the Istanbul Gold Exchange,  in March. That’s about $265 billion, or a third of Turkey’s gross domestic product, based on a gold price today of $1,640.29 an ounce.

 In March, The Wall Street Journal reported how this Turkish government, facing a bloated current account deficit is to attempt to persuade Turks to transfer their vast personal holdings of gold into the country's banking system.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

OTHER NEWS
(Bloomberg) -- U.S. Mint Gold Coin Sales Rise in May, Surpass April Total
The U.S. Mint’s sales of American Eagle gold coins rose 12 percent to 22,500 ounces so far in May, compared with 20,000 for all of April, according to data on the Mint’s website. 

(Bloomberg) -- India Withdraws Excise Tax on Gold Jewelry; Imports Set to Gain
India, the world’s largest bullion importer, has withdrawn the excise duty on precious metals jewelry, Finance Minister Pranab Mukherjee said today.

Jewelers closed stores for three weeks in March in the longest-ever strike, after Mukherjee doubled import levies on gold and imposed a 1 percent excise duty on non-branded ornaments. The stoppage ended on April 6 after the government assured jewelers that their concerns would be considered. The strike cost the industry about 200 billion rupees ($3.9 billion) in lost revenue, according to the All India Gems & Jewellery Trade Federation.

The tax removal may boost demand in India, increasing imports and bolstering global gold prices after they climbed 4.9 percent this year. Bullion is advancing for a 12th year as Europe’s debt crisis and concern that global growth is slowing has fuelled demand for wealth protection.

“The Finance Minister has understood our problems and removed the tax on both branded and unbranded jewelry,” said Bachhraj Bamalwa, chairman of the All India Gems & Jewellery Trade Federation.  “Demand should recover from now and imports will improve as jewelers who had not stocked up earlier will start buying.”

Shares of Titan Industries Ltd. jumped as much as 4.2 percent to 251.05 rupees, while Gitanjali Gems Ltd. rose as much as 3.3 percent to 318.10 rupees.

Gold imports plunged to 30 metric tons to 35 tons in April from 90 tons a year earlier after higher taxes cut demand, Prithviraj Kothari, president of the Bombay Bullion Association, said May 2. Imports in 2012 are expected to be 700 tons to 750 tons, he said. That compares with a record 969 tons last year, according to the World Gold Council.

Gold for immediate delivery was little changed at $1,641.18 an ounce at 3:59 p.m. Mumbai time today. 

 

Sharelynx.com 

 (Bloomberg) -- Gold May ‘Push Higher’ as Global Economies Slow, Fcstone Says
Gold could “push higher” over the course of this month as global economies slow, increasing expectations that central banks will take steps to boost growth, according to INTL FCStone Inc.

“We view gold, alongside the dollar, as something of a safe haven, especially if the European debt crisis starts to flare again amid renewed doubts over future policy in light of the recent elections,” analyst Edward Meir wrote in a note dated yesterday.

NEWS
Gold dragged down by weak euro on political uncertainty - Reuters

China’s Gold Imports Gain as Country May Become Biggest User – Business Week

Gold In Consolidation Mode; A Touch Lower In Asia – Wall Street Journal

India Removes Excise Tax on Gold Jewelry - Wall Street Journal

COMMENTARY

Warren Who? Gold Bugs Still Think They Have Right Idea - CNBC

The Munger Games – NY Sun

Gold: A Whole Lot Of Uncivilized People Out There... – Zero Hedge

Conor Pope: Gold? Seriously? Are Things That Bad? Mostly No – Irish Times

India Folds On Gold Excise Tax: Indian Gold Restocking Imminent – Zero Hedge

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battle axe's picture

GOLD?GUNS?AMMO?FOOD? all of the above. 

SilverIsKing's picture

Charlie Munger's interpretation: "Even turkeys don't like gold."

Short Memories's picture

Gold has just gone vertical! But not as in "I'm making lots on my physical" but "I see another buy opportunity!"

Ouch

cbaba's picture

Or better if you say Turks are not civilized:)

 

GetZeeGold's picture

 

 

Looks like the Barbarians are at the gate.

 

Operation squeeze out the last of the cheap gold : ON

 

Civilized people put their money in equities...where the pros can keep an eye on it for you.....never mind Europe is crumbling....no worries we got your back.

 

youngman's picture

I think the Chinese Yuan payment for Iranian oil in 5 years will be the benchmark where it all started...the new reserve currency...and gold will be a close second....

sushi's picture

"I think the Chinese Yuan payment for Iranian oil . . ."

Is a great reason to bomb Iran back into the stone age. Iraq, Lybia, any country which sanctions a global reserve currency other than the FRN better have excellent air defences.

"I think the Chinese Yuan payment for Iranian oil . . ."

Is a great reason to bomb Iran back into the stone age. If the price of oil drops below the price KSA requires to maintain internal stabilty then the only way available to drive up the price is to bomb Iran, destroy their production capacity and eliminate Iranian oil from the market.

Bombing Iran is also good for the US mfg sector. Dropping ordance worth several billion dollars means it must be replaced and this will be good for US factory orders.

Bombing Iran is also good for the US political elite. Nothing like a small ME conflict to cement voter support in November.


fajensen's picture

Trouble is: Iran has the capability of giving Saudi a good pasting before going out and even after Iran has "been liberated" by the US, there remains the capability of fermenting decades of unrest and terrorism!

The iranians are Persians, not Arabs. While they might not like the mullah's much, they despise the Saudis even more and they especially despise US and the west for their servitude to Saudi interests in return for oil.

Besides, it would be a huge political mistake to attack Iran because the Iranians are quite possible the most sensible people in the middle east*, like Syria and Jordan; all we will acheive is clearing space for yet more extremist barbarians - as in pretty much *everywhere* the western do-gooders and world-improvers go to liberate ressources.

*) Every family in Iran has someone who was killed either by Saddam or the Shah, the cronies of the West - when I was there for some work, some people mentioned it but nobody cut my head off over it or poisoned my food.

emersonreturn's picture

while bombing iran back to the stone age may be considered (by some) a strategic and economically sound move...it may also highlight a strategic miscalculation on the part of the administration.  it's been clear for years that many are waiting for an opportune time to  move away from trading oil in dollars.  the administration's latest postering and misadventure has provided these powers their golden opportunity.  once oil trades in gold and yuan, the dollar has lost whatever remaining illusion it had as the dominant player.  as well, any military action against iran risks further bankrupting a nation already sinking in debt. such a play simply to secure oil pricing and domestic mfg (already shipped offshore), may in fact backfire.  in any case, postering for the sake of israel or supposed world security may signal an official transfer of power to china, and should be prudently thought through before wilfully played.

dannyboy's picture

Dollar dies not with a bang but a whimper.

BenwaBall's picture

Don't hold your breath.

5880's picture

or doesn't die at all

pretty sure we have the biggest army

that's what the dollar represents

A Nanny Moose's picture

But we have less than no dollars with which to even pay that Army. We have spent the last 10 years burning that army out, and inciting rational thought about war.

We cannot quite replace them with robots just yet, and even 12-years olds will demand cheetos and Monster to fly those drones.

gold-is-not-dead's picture

barbarians...sarcasm of course...

UTICA CLUB XX PURE's picture

Quoting here: "Iranians and Arab Spring countries are buying “massive quantities of gold” in order to protect their wealth from political instability and depreciating currencies."

Wow, that's the same reason I hoard away silver every chance I get...


GetZeeGold's picture

 

 

We will look back in history and call it the great gold giveaway.....thanks NYFED/BIS!

 

Monedas's picture

Colloidal Silver:    Two boats, laden with silver, collide and sink !     Monedas   1929      Comedy Jihad  Accidental Humour

_underscore's picture

Happens all the time around here...

francis_sawyer's picture

4 junks? That was kind of funny I thought... But then again, my joke meter is a little rusty as I haven't read any Obama or Romney headlines yet today...

~~~

Goin out to vote for Ron Paul today... (If francis_sawyer doesn't make it to the comment section tomorrow, y'all will know I was taken out by a predator drone on the way home)...

_underscore's picture

Me too FS.  Sadly, I think some readers here aren't the sharpest tools when appreciating 'silly' wit and set any nasty PM comments with a down arrow. Punning is a much under rated art form, imho; but there again I'm from the UK.

SDRII's picture

A huge explosion jolted the city of Shoushtar in Iran's Southwestern province of Khuzestan minutes ago. FNA dispatches said the blast was heard throughout the city and scared the population, most of whom took to the streets to find out the cause of the explosion. Relief and rescue squads along with fire fighters have rushed to the blast area.

LongSoupLine's picture

Obama, Congress, Bernanke...

"winning"

Bastiat009's picture

Those people are stupid. Gold is losing value faster than the euro.

Ok I was being sarcastic but not lying.

GetZeeGold's picture

 

 

Amazing what you can do with trillions of hot QE dollars.

 

Are you really that stupid?

 

fonzannoon's picture

apparently you can buy gold and silver cheaper today than it was yesterday. Fkin bizarro world.

Bastiat009's picture

You guys don't get it, do you? Gold is crashing. Whehter you like it or not, whether it makes sense or not, it is falling faster than the euro. Gold sucks in 2012 and is, as always, behaving horribly in times of crisis. The red arrows mean you live in fantasy world when I live in the real world.

Son of Loki's picture

Mainland China’s gold imports from Hong Kong surged a huge six fold in the first quarter when prices were between $1,550/oz and $1,800/oz and this demand is supportive of prices at these levels.

 

It's no surprise. The PRC Gub'mint has told its own people to cool off on the RE buying and grab the shiny yellow metal as an investment.....and makes Charlie Munger even madder.

disabledvet's picture

Very unusual to see the price of grains start outperforming gold and silver. Precious metals markets are "controlled markets" of course. Grain markets are not however. (Nor is water I might add.) With the cost of transportation still falling I see nothing to prevent the extraordinary surge in economic activity in "the Farm Belt." Where that food ends up of course...

GetZeeGold's picture

 

 

Precious metals markets are "controlled markets" of course. Grain markets are not however.

 

That's cute.....everything is controled to a degree.

 

MrNude's picture

Upcoming war in 5,4,3,2,1....

MFL8240's picture

Why would anyone want gold, just look at the courrtion in the Gold and Silver market in America.  I have never seen such a courrpt group in my life, cant imagaine anyone wantinmg this junk metal when they can own US dollars backed by a country with 16 Trillion in debt it can't afford to pay back. 

JustObserving's picture

Gold is being smashed now.  It is down 1.36% now. Silver down 1.85%. Only barbaric terrorists own gold and silver.

When will attacks on gold and silver cease?

Temporalist's picture

Maybe it's to align with the hearing to abolish the Fed by the Financial Services Subcommittee on Domestic Monetary Policy and Technology headed by Ron Paul?

http://www.dailypaul.com/230864/ron-paul-subcommittee-to-examine-proposals-to-reform-or-abolish-federal-reserve

eddiebe's picture

Until TPTB decide to revalue.

GetZeeGold's picture

 

 

When will attacks on gold and silver cease?

 

When it's out of the stupid peoples hands and into the hands of the PTB.

 

You might as well buy the subsidized metals....you're paying for it.

 

hoos bin pharteen's picture

Beat-down may be precursor to QE3.  The Fed's running out of time to do over QE before the election.

sessinpo's picture

In "Lessons from the Great Depression", Peter Temins,

Recollecting what I read, it has been years. Vast amounts of gold was transferred from nation to nation creating an imbalance.

 

History repeats or at least rhymes again. sigh.

ArrestBobRubin's picture

Dumb and Dumber:  Whorin' Muppet and Charlie Bung-er.

But evidently, these Arbiters of What is Civilized aren't civilized enough to obey the law themselves: Buffett, Munger, Berkshire Crooks Face Tough Questions by SEC and Shareholder

And Oh My what a wicked rap on ther knuckles they can expect! Fear not, after all, Mary Shapiro's SEC Team is on the case here!

eddiebe's picture

Stupid idiot US policy to exclude Iran from SWIFT is forcing nations out of $ settlement and so weakening the $ reserve currency hegemony. Will this force the US to play the military card? Could very well be! The shit will hit the fan if that happens. Type WWIII action could be possible. No wonder the last executive order by our POTUS.

 Sure gold is being smashed, now is not the time to weaken, mates.

francis_sawyer's picture

"The lack of enthusiasm for bullion amongst western buyers in recent weeks may be beginning to change as there has been an increase in demand in recent days due to growing concerns about Spain and the risk of contagion in the Eurozone"

~~~

The lack of enthusiasm for bullion amongst western buyers in recent weeks may be beginning to change as it dawns on them that they cannot arrogantly manipulate paper prices forever without it resulting in bullion moving out of vaults & exchanges, and into Chinese, Russian, & Middle Eastern hands...

There, fixed it...

Bastiat009's picture

Gold has been crashing in recent days. I am a bit, no very much fed up with people who say that prices are going up when they are not. How hard is it to report facts, things happening in the real world. Like when it rains, it rains, even if that sucks.

Temporalist's picture

I'd be more worried about McDonalds.  If people can't even afford fake food what can they afford (besides iPads)?

 

Oil and equities go down as well as gold...seems logical that people are dumping winners to pay for losers.

Hobbleknee's picture

WTF just happened to gold?

Bastiat009's picture

It's crashing because the euro is in danger. The trade has been going on since the euro was introduced in 2002. Euro and gold have traded in tandem mostly since then.

ActionFive's picture

The fed ties it to whatever is crashing so they can preserve the dollar.

JOYFUL's picture

So...

now that the truth comes out, a month or so after the infamous WSJ make it all up story about Turkish "gold confiscation"... will the dazzlingly duplicitous Wolf(I was in Turkey once in 97, and I'm gonna write a hit piece pretending my outdated impressions are hot offa the press) Ritcher issue a retraction regarding his completely misinformed speculations and slavish regurgitation of MSM propaganda[as witnessed here http://www.testosteronepit.com/home/2012/3/25/gold-confiscation-inflatio... - or here http://www.zerohedge.com/contributed/2012-13-30/greece-now-they%E2%80%99... ....]

or just shrug it all off an carry on screaming to anyone who will listen - Facts?!? We don't need no stinkin facts!!! I'm the new face of journalism!

I made a case for truth in journalism at the time even the mighty ZH got caught on the wrong side of that cock-up - http://www.zerohedge.com/news/turkish-government-goes-gold-seeks-transfe... but I'll gladly cut the Tylers slack cause they're right more times than the rest of the sad sack media is wrong(which is pretty much always)...

from our hosts, I don't need a retraction, or even a free T-shirt - just promise to replace that stain on the top banner of the ZH site with someone representing responsible journalism n integrity...Dump the Chump! ...we'll all win...cept the  lupoid loser in the coyote costume!

 

Bastiat009's picture

Gold is about to turn negative for the years, while the US$ has been rallying for months.

I know you won't like it but it's a fact. And people who don't like facts are people who love MSM which tell them what they want to hear.

geewhiz190's picture

useless info and questionable to say the least. like i have been saying, the US dollar looks ready to advance. the euro and the yen are the last of the mohicans. the yen may be just about ready to fold. if it does DXY could reach new highs. commodity related shres both here and overseas seem to be discounting furtherr hard asset declines. debt is deflationary.

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