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This article was originally written for Türkiye Today’s weekly economy newsletter, Turkish Economy in Brief, in its Oct. 13 issue. Please make sure you are subscribed to the newsletter by clicking here.
The recent historic surge in gold prices has brought certain imbalances to Türkiye’s markets. To recall the figures first: In global markets, gold closed last week at $4,017 per ounce, marking a remarkable 53% gain for the year. This increase also represents the fastest rise in gold prices since 1979.
Throughout the year, trade wars, geopolitical risks, and a nearly 10% decline in the U.S. dollar index supported gold prices.
More recently, the U.S. Federal Reserve’s resumption of interest rate cuts, along with expectations of further reductions and the U.S. government shutdown, have accelerated the upward movement of the yellow metal.
Meanwhile, the World Gold Council’s September report confirmed the strong global appetite for gold. Global gold exchange-traded funds (ETFs) saw inflows of $17 billion in September, marking the highest monthly inflow in history.
In the third quarter of 2025 alone, gold ETFs attracted $26 billion, the strongest quarterly performance ever recorded.
As a result, total assets under management in global gold funds reached a new peak of $472 billion, while total physical gold holdings rose to 3,838 tons. Most of September’s inflows came from North America ($10.6 billion) and Europe ($4.4 billion), followed by Asia ($2.1 billion) and other regions ($175 million).
Turning to Türkiye, the price of one gram of gold traded in the spot market rose 81% in 2025, reaching a closing price of ₺5,400, supported by movements in global ounce prices.
However, when you go out to buy gold in the market, you encounter three different prices:
These figures reveal a price gap of up to 26% between actual and market prices, reflecting turmoil in the gold market.
The main reason of this imbalance is the strong demand for gold combined with limited physical supply.
Reports that some jewelers suspended gold sales last week were also among the key developments in the market.
At this point, Türkiye’s physical gold market is pricing the ounce at $4,281, making new gold investments highly costly and risky.
Those who bought earlier, however, are enjoying large profits.
Among the central banks that purchased the most gold this year, the Central Bank of the Republic of Türkiye (CBRT) increased its holdings to 650 tons. Supported by rising gold prices, the Bank’s total reserves reached a record $186.2 billion.
It is also estimated that Turkish households hold around $500 billion worth of gold "under the pillow."
CBRT Governor Fatih Karahan, speaking before the Turkish Parliament’s Planning and Budget Committee last week, said the increase in gold prices in 2024 has created a wealth effect exceeding $100 billion, supporting consumer demand through the asset channel.
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