There has been an unusual activity in gold prices in the last weeks. What does this positive increase mean? Will it continue?
First of all, it should be said that the volatility in prices is completely related to the domestic market. Ounce prices have followed a course between 1.971 and 2.056 USD in the last month and are moving in a price band of 2.024 USD on 08.05.2023. The monthly change is 2.6%. A course in this direction is not enough for gold to make a very serious increase in TL.
When we look at the monthly course of USD/TL, we see a parity between 19.68 and 20.65. As of 08.05.2023, USD/TL seems to be 20.51. The monthly change was 4%.
Gold / TL prices, on the other hand, have followed a course between 1,276 TL and 1,406 TL in the last month. While closing as 1.397 TL on 08.05.2023, the monthly change was 10%.
In the light of these data, we can clearly say that the increase in gold is due to domestic market dynamics, independent of USD/TL and Ons prices.
Our country has a serious gold production infrastructure. Naturally, there is a very serious demand for raw materials. At the same time, when there was a serious demand on the basis of the end consumer, the current supply was insufficient to meet the demand.
In addition, the restrictions imposed on gold imports by the competent authorities further fueled the already insufficient supply, causing it to make a very serious premium compared to the London markets.
Now the question is, what will be the end of this business? How long will this situation continue? Will gold prices come back?
If the restrictions on gold imports continue, prices will continue to rise. If the way for imports is opened, it is expected that the prices will come back.
In short, Turkey is not a self-sufficient country in terms of gold.