How will the Central Bank's pause on gold purchases affect the market?

The Central Bank of the Republic of Türkiye (TCMB) has decided to temporarily suspend the purchase of gold obtained from domestic sources. This move is expected to both reduce the price gap in the domestic market and lead to a revision in the year-end levels anticipated for gram gold. Industry experts state that this decision will not only contribute to balance in the gold market but also narrow the high price spread that has formed between international and domestic markets.

With the priority purchase right implemented for years, the TCMB was incorporating a significant portion of the gold extracted from mines into its own reserves. This right was established through a regulation introduced in 2017. However, with the new practice, domestically produced gold from mines can now be sold directly to market actors. This will facilitate the direct supply of gold to the market.

Approximately 40 tons of gold are extracted in Türkiye each year. Experts are of the opinion that offering gold to the market through commercial actors could also reduce the need for gold imports and the associated current account deficit.

Central Bank data indicates that between 2008 and 2025, the total gold production reported to Borsa Istanbul from the country's mines approached 500 tons, with approximately half of this production purchased by the Central Bank.

EXPECTATIONS FOR GRAM GOLD ARE BEING RESHAPED

While gram gold drew attention with an 83 percent increase in 2025, year-end price forecasts have also been reviewed following the decision. Previously, due to volatility in the dollar exchange rate and the rise in ounce gold prices, it was projected that gram gold would reach 7,000 liras by the end of the year. With recent developments, experts' expectations have been revised downward by 1,000 liras to the 6,000 TL level.

Gold and Money Markets Expert Mehmet Ali Yıldırımtürk pointed out that the Central Bank's cessation of gold purchases from domestic mines would re-establish the supply-demand balance, stating, "The import quota placed on gold had pushed the spread up to 12,000 dollars. As gold prices underwent a correction, this spread narrowed to 5,500 dollars in the last week. As long as this decision continues, the gap will narrow, and gold prices will settle into balance." Yıldırımtürk also noted that the price spread could fall to 1,500 dollars, updating his year-end gram gold forecast from 7,000 TL to the 6,000-6,250 TL band.

Finally, while ounce gold was trying to hold at the 4,000 dollar level, gram gold finished the week at 5,441 liras. With the Central Bank pausing its purchases, the fact that gold extracted from mines will be offered directly to the market seems likely to accelerate the search for price equilibrium in the market.