The new gold rush in Turkey

It often happens that when a foreigner is invited to a wedding in Turkey, they start to wonder what to give as a gift, as there is no wedding list to guide them and no account number on the invitation for deposits. And, when they learn the answer, they are often even more surprised: gold. The precious metal is given in Turkey at weddings, at births, at circumcisions. Depending on the greater or lesser closeness of the guests to the celebration, a ceyrek or quarter coin (1.75 grams of 22-karat gold worth about 100 euros), a yarım (twice the value), a tam (four times as much) or bracelets, necklaces and other pieces of jewelry, but always made of gold, can be given as a gift. Thus, a new married couple can receive between 200 and 500 grams of gold, with which to face their new life together.

It is the wife who usually takes care of the gold. In a country where the rate of incorporation of women into the labor market is low, this tradition allows them to maintain a certain financial independence, especially in case of separation: in a divorce, all the jewelry given during the wedding and half of the gold acquired during the marriage belongs to them. In fact, there is another tradition related to the precious metal: “The days of gold”, in which a group of friends or neighbors meet alternately at the home of one of them, who invites them to eat and, in return, receives from each of the guests a gold coin. These meetings are held monthly, starting at the house of the one who has the most pressing need for money, making this practice a kind of loan to meet urgent expenses.

And the fact is that these little gold coins are easy to get: they are sold in any jewelry store or in many exchange houses. And they can also be sold. That is where their usefulness lies: gold is a method of savings to protect against the constant depreciation of the Turkish lira and an easily liquid asset. That is why, in periods when the lira begins to lose value and inflation runs rampant, large queues of Turks form in the Grand Bazaar in Istanbul, ready to protect themselves against devaluation by acquiring these coins. “When people have financial problems, they solve them this way, selling the coins and getting cash,” says Adem Kurtulmus, a jeweler at the historic market.

A great importer

This practice obviously requires the import of huge quantities of raw gold. Last year, Turkey imported $20 billion of this precious metal. In the first seven months of this year alone it has already exceeded $19 billion, which is why the government has begun to impose import quotas. Gold is one of the main culprits of Turkey’s perennial trade deficit.

The other big problem is that this gold ends up in safes, drawers or under mattresses, outside the financial circuits and impossible to be computed statistically. That is why, at the behest of the government, Turkish banks have for years been promoting their own “gold days”, in which, at a given neighborhood branch, they receive jewelry and gold coins and compute them in an account from which the savings can later be withdrawn in cash or in certified gold coins. However, experts estimate that 90% of the gold held by Turkish women has not yet surfaced, the value of which, according to some estimates, could exceed $200 billion (almost a quarter of GDP). Perhaps therein lies one of the explanations for how society survives such serious crises: at the bottom of it all, there is a small buffer of gold.

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