Turkish Gold Hoarders Weigh Economic Future Against Instability

In Turkey, gold is more than just a decorative accessory; it's a safeguard against economic uncertainty. Households store around 5,000 tons of gold at home, worth approximately $600 billion at current prices. This hoarding is seen as a rational response to chronic inflation and the volatility of the Turkish lira.

Economist Selva Demiralp notes that people keep savings in physical form because they don't trust official institutions. A survey by Demiralp's research team found that nearly four in ten respondents rated their trust in commercial banks close to zero, while over half put the statistical agency in the same range.

Gold is seen as a reliable financial cushion, especially with prices hovering near all-time highs. In contrast, inflation remains a persistent crisis in Turkey, with rates around 31% annually. The Turkish finance ministry views this gold hoarding as an outdated habit that's undermining the country's economic future.