Gold Deposits Of USD 1 Billion To Be Collected By Turkish Bank
Commodities / Gold and Silver 2012 Jun 12, 2012 - 07:11 AM GMTBy: GoldCore
Today's AM fix was USD 1,589.25, EUR 1,271.40, and GBP 1,025.65 per ounce.
Yesterday’s AM fix was USD 1,593.00, EUR 1,264.79, and GBP 1,023.45 per ounce.
Silver is trading at $28.67/oz, €22.92/oz and £18.52/oz. Platinum is trading at $1,448.00/oz, palladium at $618.00/oz and rhodium at $1,200/oz.
Gold 1 Month Chart – (Bloomberg)
Gold climbed $5.60 or 0.35% yesterday in New York and closed at $1,600.20/oz despite stock markets giving up early gains on misguided optimism regarding the Spanish “bailout”.
Gold fell initially in Asia before trading sideways and this range trading has continued in European trading.
Gold edged higher Tuesday after hopes were dashed that Spain's bank bailout would be the panacea that would lead to alleviating the eurozone debt crisis.
XAU/EUR 1 Month Chart – (Bloomberg)
Gold is consolidating near $1,600/oz as investors are concerned that the sovereign debt of Spain will still be stretched to the breaking point and Greece’s possible departure from the euro will unleash more instability in the region.
The risk of contagion remains real and European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks and introducing euro zone capital controls as a worst-case scenario should Athens decide to leave the euro.
While the technicals are poor, the fundamentals remain sound with the euro zone debt crisis far from resolved. Indeed, the euro zone debt crisis will likely morph into the global debt crisis in the coming months when markets turn their attention to the Chinese property bubble and the poor fiscal position of Japan, the UK and the US.
Market watchers are waiting for the Greek elections on June 17, and also the Group of 20 financial summit plus the US Fed’s policy meeting next week.
Turkiye Is Bankası AS, Turkey’s biggest bank by assets, plans to collect $1 billion of gold in its deposit accounts by the end of the year, citing deputy chief executive officer Erdal Aral.
As much as 5,000 metric tons of gold is stored “under the mattress” in Turkey, Aral said, according to the Istanbul-based newspaper. Gold deposit accounts have surged to 13.6 billion liras ($7.4 billion) from 3.1 billion liras within the past year, according to data released by the banking regulator, Aral was quoted as saying.
Gold has always been seen as money and as a store of wealth in Turkey and now the country is leading the way with regards to the remonetisation of gold in the 21st Century.
XAU/GBP 1 Month Chart – (Bloomberg)
Turkey remained the world's number one minter of gold coins in 2011. There is an increasing tendency for gold bars to be retail investors' vehicle of choice – although gold coins still retain a majority market share.
Turkish people can pay in gold in certain foreign exchange houses and most jewellers will accept gold as payment. Turkish banks are is now offering digital gold saving accounts.
Turkey expanded its gold reserves by 29.7 metric tons in April. Turkey’s bullion reserves climbed to 239.3 tons last month meaning that Turkey increased their gold reserves by 14% in April.
The central bank on March 27 doubled the share of lira reserves banks can hold in gold to 20%, saying it would provide 6.1 billion liras ($3.3 billion) of extra liquidity.
"This addition," the WGC says, "was the result of a policy change under which the central bank will now accept gold in reserve requirements from commercial banks to help the banks utilize their gold in managing their liquidity."
Some analysts have suggested that the increase in Turkish gold reserves, as reported by the IMF, may actually be a form of “double accounting”. Whereby the gold held in Turkish banks client’s gold account is transferred from the local bank as a reserve to the central bank, from where it then figures as gold reserves.
Besides massive domestic holdings and robust demand in Turkey, the country is also importing and then exporting huge quantities of gold into Iran and ‘Arab spring’ countries with some $1.2 billion of precious metals exported into Iran in April alone.
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