Editor’s Note
**Editor’s Note:** This report examines the unintended consequences of Turkey’s gold import cap, revealing how a policy designed to curb the trade deficit is instead driving jewellery producers to close or relocate abroad amid surging domestic demand.
Restrictions on gold imports and rising demand from consumers looking to hedge against inflation are eroding Turkey’s once-vibrant jewellery export industry, causing producers to shut down or move abroad, an industry leader has said.
In August 2023, shortly after presidential elections, the government announced a limit on private-sector gold imports of 12 tonnes a month in an attempt to curb a widening trade deficit, to which bullion imports and energy are major contributors.
The measure, which also set quotas on how much gold individual traders can access, has been successful in limiting imports. Year-end 2024 inbound shipments of just under 126 tonnes were less than 40 percent of the total from the preceding year, according to Borsa Istanbul figures. The trend has continued into 2025.
The quota system has come at a cost, Mustafa Kamar, president of the Turkish Jewellery Manufacturers and Exporters Association, told AGBI.
Since the introduction of the cap two years ago, more than 200 jewellery workshops and exporters have closed their doors, resulting in about 15,000 job losses, he said.
Having once been among the top three countries for jewellery exports, Turkey would now struggle to get into the top 10, he said.
That gap, brought on by shortages and high domestic demand fed by concerns over the economic and political climate, led domestic prices for an ounce of 24-carat gold to top $4,360 on October 21, compared with $4,269 in the US.
Kamar said a tighter supply chain has also affected exports.
After a peak of $1.1 billion in January, monthly jewellery exports have tailed off across the year, dipping to a low of $503 million in September, according to the Turkish Exporters Assembly.
Kamar said that if there had been no quota exports would have hit $23 billion, whereas they are now worth $6 billion.
One reserve that could be tapped is bullion holdings in private hands, though past efforts to prise this loose have not met with success.
Some estimates value gold held privately in Turkey at more than $500 billion, but the rush into bullion by Turks worried about political volatility means it is unlikely much of this under-the-mattress reserve will return to the market soon.
A government crackdown on opposition-run municipalities has led to dozens of elected officials being charged with a range of offences including fraud and links to terrorism.
Turkey will have to relax the gold import policy if it wants to preserve its jewellery sector and boost exports, financial analyst İslam Memiş said.