This is the information shared by the president of the Istanbul Jewelry Chamber of Commerce (İKO) Mustafa Atayık on Hurriyet - a major Turkish newspaper, quoted by Kitco News.

Accordingly, Atayık estimates that nearly 5,000 tons of gold are stored at home by people, with a total value of more than $500 billion. According to Atayık, “lack of trust” in the currency and financial institutions is the reason why many Turks continue to keep their savings at home.

The amount of gold mentioned above is very large compared to the amount of gold held by major countries in the world .

Specifically, in the first 5 months of the year, the People's Bank of China (PBoC) net bought 17 tons since the beginning of the year, bringing its gold reserves to 2,296 tons. The Central Bank of Russia (RCB) holds about 2,300 tons of gold. The US is still the country with the largest gold reserves with about 8,133 tons. Germany has about 3,350 tons, Italy (2,452 tons) and France (2,437 tons).

Atayık is proposing the creation of a “Gold Bank” for the Turkish people. This specialized bank would be run by İKO as a public legal entity. Goldsmiths would be able to join as cooperatives, hold capital in gold, and receive government support. At the same time, the bank would standardize rules and practices to bring the gold hidden “under the mattress” (of the people) into the economy .

Kitco Gold.jpg
About 5,000 tons of gold are hidden in Turkish homes, worth at least $500 billion. Photo: Kitco

Atayık said less than half of the gold imported into Türkiye is destined for the jewelry industry. “Only about 40-50% of the total gold imported is actually used by the industry,” he said.

He cited data from the Gold Mining Association showing that as of 2023, Türkiye has 18 gold mining sites that have completed feasibility studies and licensing applications.

Atayık said that gold mining output in Türkiye will reach 35.5 tons in 2023 and 32.2 tons in 2024. And Türkiye can increase domestic production and recycle scrap gold, thereby meeting demand without relying on imports. Thus, avoiding outflows of money and meeting local raw material demand.

Türkiye has struggled with a depreciating currency and hyperinflation for years, and the country has also seen record levels of gold smuggling.

According to a report by Mackenzie Crow, Turkish security forces seized around 350 kg of smuggled gold at border crossings in less than the first 3 months of 2024, exceeding 60% of the total gold seized in all of 2023.

The huge demand for the precious metal has led to gold prices in Türkiye being around $5,000/kg higher than international prices, attracting both individuals and organized criminals looking to make a quick profit.

The main reasons for the increase in smuggling are high domestic demand and the limits imposed by the Turkish authorities on gold imports. The government 's system of gold bullion import quotas, aimed at narrowing the current account deficit, has exacerbated the supply shortage, pushing up the price differential with the world market.

According to Mehmet Ali Yildirimturk, vice president of the Goldsmiths Association, there are almost no gold sellers recently, while there are many small buyers. Demand cannot be met as the Turkish government still has to limit imports.

Tight monetary policy and gold import quotas being imposed in Türkiye are efforts to stabilize the economy, but also pose challenges in managing demand for gold as a traditional safe-haven asset.

Gold price at historical peak, USD continues to fall: China makes strategic moves China continued to increase gold purchases in May, adding to its reserves even though the price of gold remained at a historical peak. Beijing reduced its holdings of USD and made strategic moves to establish influence in the international market.

Source: https://vietnamnet.vn/5-000-tan-vang-giau-kin-tai-tho-nhi-ky-2419218.html