Gold‑loving Turks grew $300 billion wealthier in the past year as record prices swelled the value of their holdings to nearly half the size of Turkey’s economy, but the resulting resilience in domestic demand has slowed the country's already difficult fight against inflation. With global bullion soaring to all-time highs since the summer, the total value of Turkey's gold stock, opens new tab has climbed to more than $750 billion, which is exceptionally high by global standards considering Turkey's GDP of about $1.57 trillion. The Reuters Gulf Currents newsletter brings you the latest on geopolitics, energy and finance in the region. Sign up here. Advertisement · Scroll to continue
The central bank says $600 billion of that stock is "under‑the‑mattress", or "under-the-pillow" in Turkish: gold held by households and companies outside the banking system, reflecting a long tradition of Turks holding tight to the metal as a safe, portable, tangible store of wealth. The doubling of the value of these coins, bangles and other gold pieces in a year has encouraged spending, despite annual inflation above 30%. Economists and the central bank say this has complicated a disinflation path, prompting slower interest rate cuts. CONFIDENCE TO SPEND Gold hit $5,000 an ounce last month, driven by trade disruptions and geopolitical instability. Advertisement · Scroll to continue For Turks, the global gold rush marks some relief after a nearly decade-long inflation and currency crisis at home that slashed their earnings and savings. "I've been investing in physical gold for a year, buying it piece by piece whenever I save up," said 21-year-old air conditioning technician Furkan as he used cash to buy a gram of gold at an Istanbul shop. "I believe prices will rise even further. I'm planning to buy a car."
