Newsletters
Some jewelers at Istanbul's Grand Bazaar have halted gold sales as the spread between buying and selling prices reached ₺500 ($11.9) amid unprecedented volatility, merchants said on Friday.
The spread between buying and selling prices for gram gold, generally around ₺50-100 ($1.2-$2.3), has risen to ₺500 at the Grand Bazaar, making it nearly impossible for investors to track real prices, according to a report by the Turkish media outlet Türkiye daily.
Speaking to Türkiye daily, Mehmet Dursun, who has operated a jewelry shop at the Grand Bazaar for 25 years, said the activity in recent weeks has been "unprecedented."
"Finding gold has become almost impossible," Dursun said.
"We don't know what price to give. The price we set in the morning loses its validity by noon. The ounce changes within minutes, and we have difficulty telling customers an exact figure. That's why some colleagues temporarily stopped sales," he added.
Another Grand Bazaar jeweler, Zeki Caliskan, drew attention to the psychological effect in the market.
"Citizens have a serious panic mood," Caliskan said.
"People are buying with the thought that 'gold will increase more,' but these prices can pull back at any time. We constantly update prices because the spread has never been this wide. The difference between buying and selling exceeds ₺500. This difference challenges both investors and us," he noted.
Many jewelers cite a squeeze in physical gold supply as the reason for the widened spread. Merchants say finding gold has become difficult and sharp fluctuations in ounce prices are negatively affecting their business.
The intensity at the Grand Bazaar is reminiscent of the significant gold rally during the 2020 pandemic period. Long lines formed at jewelry shops, while some merchants stopped selling.
Gold prices experienced sharp movements in global markets. Once gold, which broke a record at $4,059 on Wednesday, fell 1.62% in Thursday's trading and closed at $3,976 due to profit-taking.
This decline also marked the "sharpest daily loss" in the records, with a 1.62% decline on Aug. 11. After the sharpest profit-taking in the last two months, the search for balance continues around $3,980 on the week's previous trading day as of 6 a.m. Turkish time, according to a report by the Türkiye daily.
Following the ceasefire agreement between Israel and Hamas, demand for "safe haven" declined in the market along with "a decline in geopolitical risks," according to Türkiye daily.
Additionally, the dollar index rose above the 99 level on Thursday, heading toward the peak of the last 10 weeks. This development made gold expensive and technically triggered profit-taking in ounce gold, which had already reached the overbought zone.
Analysts say $3,940 should be monitored as critical support in ounce gold in the very short term.
"If this level breaks downward, sales can accelerate," analysts say, according to Türkiye daily's Economy Service.
"However, confidence in the long-term rise continues to remain strong. After the 25 basis point move in September, additional interest rate cuts are expected from the U.S. Federal Reserve in October and December as well. The U.S. government is still closed, and uncertainty about this continues. Central bank purchases continue and strong ETF inflows continue," the analysts noted.
1 min read
3 min read
