Turkey's centuries old
relationship with gold has been primarily facilitated by jewellery
makers but, in recent months banks have been pouring their expertise
into convincing customers to open gold deposit accounts.
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Posted: Thursday , 05 Jul 2012
ISTANBUL (Reuters) -
For centuries, Turks have flocked to the jewellery shops of Istanbul's labyrinthine Grand Bazaar to trade their gold - ornaments handed down through their families over generations, or bars stashed under mattresses as savings. But in recent months the shops have a new and unexpected competitor: banks.
The country's commercial banks are pouring their technical expertise and marketing resources into offering their customers gold deposit accounts. Customers hand their gold to a bank and can make withdrawals from their accounts in gold bars or the lira currency; the accounts offer interest rates that are substantially lower than those on normal time deposits.
Gold deposit accounts have been growing around the world, but Turkey's boom has made it a leader in the trend. This appears to have cut the amount of gold flowing to jewellers in the Grand Bazaar and elsewhere in the country, a trend which dismays the shop owners. In the long run, it could threaten their business model, which relies partly on turning scrap gold they buy into jewellery and selling it back to retail customers.
"Where is the emotion when you go to the bank?...This trade should not be seen only as gold or money, it is an emotion, a life," said 60-year old jeweller Turgay Ayardem, who has been working at the bazaar for 45 years.
The head of the Istanbul Chamber of Jewellery, Alaattin Kameroglu, said: "People will make losses because of the banks. They will become less interested in jewellery, and the sector will be hit.
"We as the jewellery sector are also banks' customers, we use their point-of-sale machines, credit cards and loans. We plan to take action against banks which have forgotten about doing banking and started collecting gold," he added without elaborating. Source:
Turkish banks gettingin on the gold action - GOLD ANALYSIS - Mineweb.com Mineweb
