The central bank is still on a gold buying spree.

SMM: this year, Turkey is expected to mine a record amount of gold, and the Turkish central bank is likely to buy it all at a price close to an all-time high.

Yussel (Hasan Yucel), director of the Turkish gold miners' association, said in an interview that as one of the world's largest gold buyers, Turkish gold production is expected to increase 16% this year to 44 tons.

In 2017, Turkey introduced a law giving the central bank the right to give priority to the purchase of gold mined in the country at current market prices. "since the introduction of this law, the central bank has been the only buyer of our gold," Mr Yussel said. " He predicts that the trend this year is also unlikely to change.

The value of Turkey's gold reserves has soared as Turkey's central bank has cut its foreign exchange reserves to a nearly 15-year low to support its weakening currency. In the week to August 7, the value of Turkey's gold reserves soared to an all-time high. Although the value of reserves fell by 5% a week later, the biggest drop in five months, that actually mainly reflected changes in gold market prices over the same period, not because of a sell-off by the Turkish central bank.

At the end of June, the Ankara-based Turkish central bank had 583 tons of gold reserves, up from 413 tons at the end of 2019, according to the World Gold Council. Although still lagging far behind the largest holders of gold such as the US or Germany, Turkey's central bank is the world's largest buyer of gold this year, increasing its holdings by about 170 tonnes. Turkey ranks fifth in terms of consumer demand.

A spokesman for Turkey's central bank declined to comment on its gold-buying strategy.

In addition to the central bank, Turks are also big buyers of gold. Gold has always been a traditional gift for important occasions such as Turkish weddings. (Grand Bazaar), the bus bazaar in Istanbul, is one of the oldest indoor markets in the world, and businessmen here usually pay rent in gold.

This has kept local demand for gold at about 160 tonnes over the past 25 years, while consumers expect to buy at least 150 tonnes this year, Mr Yussel said. Turkey imported 160tonnes of gold worth $7.2 billion in 2019, compared with 137tonnes in the first seven months of this year, the Turkish Gold miners' Association said on Monday.

Jin Shi has previously reported that Turkish residents have recently gone on a gold buying spree as the Turkish lira has fallen. Although local radio stations tried to send a message to the public that the lira exchange rate would remain stable, the move clearly did not work, with Turks buying $7 billion worth of gold bars in just two weeks.

Yussel, chief executive of Tumad Madencilik As, Nurol Holding As's gold mining division, pointed out that the surge in gold prices had boosted local investor interest in gold mining, although local consumer demand had cooled as a result.

Yussel said Turkey's current recoverable gold reserves of 1500 tons are larger than the natural gas reserves discovered in the Black Sea announced by President Recep Tayyip Erdogan (Recep Tayyip Erdogan) on Friday.

"Turkey's value-added from gold is much greater than the natural gas found, which shows that the government needs to provide more support for gold mining."

Mr Yussel adds that the industry has attracted $6 billion in exploration investment over the past 30 years.

According to him, the Canadian gold mining companies Alamo Gold Inc, Nurol of Turkey, Guris Holding AS and Calik Holding AS plan to invest at least US $100m each in the Chanakale (Canakkale) and Barak Esier (Balikesir) regions in western Turkey, or in Artwin province in north-eastern Turkey, bordering Georgia.

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