Gold purchases halted, market remains unaffected

The Central Bank of the Republic of Turkey (TCMB) had made a decision to stop purchasing domestically produced gold. However, following this decision, some media outlets and social media platforms misinterpreted the move, claiming that the TCMB had stopped gold sales in the market. The Gold Miners Association announced that these reports were based on a misunderstanding, clarifying that the decision does not affect gold sales in the free market and is intended solely to ease the domestic market.

GOLD PURCHASES HALTED, SALES REMAIN FREE

The Gold Miners Association explained the reasons behind the TCMB's decision to stop gold purchases and the effects of this step on the market. In a statement issued by the association, it was noted that "gold sales continue under free market conditions." This statement highlighted that reports circulating on social media claiming that "the TCMB has stopped gold sales" are incorrect.

CENTRAL BANK'S DECISION TAKEN TO PROTECT MARKET BALANCES

Gold Miners Association President Hasan Yücel stated that the TCMB's decision to stop gold purchases is aimed at closing the gap between global gold prices and those within Turkey. Yücel emphasized that this move is intended to resolve difficulties in the jewelry sector. Furthermore, it was pointed out that a significant price difference between global and Turkish gold prices had emerged due to the gold import quota that came into effect in 2023. It was stated that this price gap had created negative effects, particularly in the domestic market.

WHAT IS THE GOAL OF THE NEW REGULATION?

The statement said, "Although the Central Bank has stopped purchasing gold produced from mines for the last two weeks, this gold is being offered for sale through banks and financial institutions listed on Borsa Istanbul under free market conditions." It was stated that this is a step taken to address market imbalances and will help meet the gold demand in the domestic market.

The association noted that such moves by the Central Bank, which aim to increase reserve diversity and ensure market regulation, are important for stabilizing the economy. Additionally, it was stated that this decision is positive in terms of increasing domestic production and reducing the risk of a current account deficit caused by gold imports.

The Gold Miners Association noted that the Central Bank's decision to stop gold purchases is a beneficial step for the national economy and that the TCMB may turn back to gold purchases as the domestic market improves. The association predicted that the Central Bank might make decisions to add gold to its reserves again once domestic market balance is achieved in the coming period.

VOLATILITY IN GOLD PRICES MAY ALSO HAVE PLAYED A ROLE

The Gold Miners Association stated that another possible reason behind the TCMB's decision to stop purchases is the volatility in gold prices. While the gap between different prices creates instability in the market, it is stated that the Central Bank aims to regulate the market with this move.

News Source: 12punto