{"id":7115,"date":"2025-07-01T12:14:23","date_gmt":"2025-07-01T10:14:23","guid":{"rendered":"https:\/\/www.investorofemet.it\/turks-holding-large-quantities-of-gold-under-their-pillows\/"},"modified":"2025-07-01T12:14:23","modified_gmt":"2025-07-01T10:14:23","slug":"turks-holding-large-quantities-of-gold-under-their-pillows","status":"publish","type":"post","link":"https:\/\/www.investorofemet.it\/en\/turks-holding-large-quantities-of-gold-under-their-pillows\/","title":{"rendered":"Turks Holding Large Quantities of Gold Under Their Pillows"},"content":{"rendered":"

Turks have billions of dollars in gold<\/a> “under their pillows.”<\/p>\n

The Turkish central bank estimates that Turkish households hold more than $311 billion in unregistered gold, most of it outside the official financial system.<\/p>\n

The central bank calculated this amount by adding the current quarter’s gold production and imports to the reserves<\/a> from the previous period and then subtracting gold exports.<\/p>\n

To put the amount in perspective, the Turkish central bank holds $86.5 billion in gold reserves.<\/p>\n

Turks have a long history of “under-the-pillow savings,” a term referring to keeping valuables such as gold at home.<\/p>\n

Why?<\/p>\n

There are a number of reasons, some deeply rooted in Turkish culture.<\/p>\n

Turks traditionally gift, save, and invest in gold. As Turkiye Today<\/em> stated, “This cultural norm is deeply embedded in social life, where gold serves both symbolic and financial functions in weddings, religious ceremonies, and as a reliable form of household savings.<\/em>”<\/p>\n

Turks regard gold as the most reliable safe-haven asset and tend to “view jewelry as a hedge against financial volatility, reinforcing their longstanding preference for tangible, personally held assets.”<\/em><\/p>\n

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Turks hold a great deal of gold in the form of jewelry. But it is not the same type of gold jewelry typically found in the United States: Turkish gold jewelry tends to be much purer, generally 18 karats or higher. This is much closer to investment-grade gold.<\/p>\n

According to the World Gold Council, Turkey is the fourth-largest gold jewelry market in the world, behind only China, India, and the United States. Over the past decade, annual gold jewelry demand has averaged 41 tons.<\/p>\n

Tepid economic growth has created headwinds for Turkish gold demand, particularly after the 2008 global recession. In the late 1990s and early 2000s, Turkish gold jewelry demand exceeded 150 tons per year. This corresponded with double-digit GDP growth.<\/p>\n

Although jewelry demand has contracted, demand for gold coins and bars has remained resilient. According to Turkiye Today<\/em>, the gap between investment-oriented demand and jewelry demand has become “more pronounced” in recent years, as “macroeconomic instability” has intensified.<\/p>\n

“With persistent inflation and the weakening Turkish lira eroding confidence in the national currency, households have increasingly shifted their savings toward physical gold. This trend has favored bars and coins over traditional jewelry, especially after Turkey’s inflation rate peaked at 85.51% in October 2022, according to official data.”<\/p><\/blockquote>\n

However, cultural impulses die hard. Jewelry demand has also increased, with the last quarter of 2023 reaching the highest level since 2016.<\/p>\n

“This surge was primarily driven by households seeking a tangible hedge against inflation and currency depreciation. Rather than opting for formal investment products, many preferred jewelry as a practical and wearable form of savings, allowing both wealth preservation and direct control over personal assets.”<\/p><\/blockquote>\n

Gold also protects investors from taxation on interest on deposits and large financial transactions. Simply put, the government cannot collect taxes on gold tucked under a pillow.<\/p>\n

“In contrast, gold purchased and held privately, especially outside the banking system, remains largely beyond the reach of tax authorities. This makes gold not only a stable store of value but also a discreet way to preserve wealth.”<\/p><\/blockquote>\n

Economist Mahfi Egilmez told Turkiye Today<\/em> that these gold reserves serve as a financial cushion for the country.<\/p>\n

“During periods of economic hardship, individuals and businesses liquidate part of their gold or foreign currency reserves to meet urgent needs. Once stability is restored, they tend to replenish these reserves gradually, usually through informal and undocumented means. This continuous cycle of withdrawal and replenishment reflects a widespread strategy for risk management, especially in contexts of financial volatility.”<\/p><\/blockquote>\n

This is similar to how Indians use gold.<\/p>\n

According to a 2018 ICE360 survey, one in two households in India purchased gold in the past five years. Overall, 87% of Indian households own gold. Even households with the lowest income levels in India hold some of the yellow metal. According to the survey, over 75 percent of households with the lowest income managed to buy some gold.<\/p>\n

The yellow metal has been a lifeline for Indians hit by the economic storm caused by the government’s response to COVID-19. After the Indian government locked down the country, banks tightened credit to mitigate default risk. Unable to obtain traditional loans, Indians used gold to secure financing. As Indians endured a second wave of lockdowns, many resorted to selling gold outright to make ends meet.<\/p>\n

The Turkish government has sought to tap into some of the revenue from the country’s massive underground gold market, but has had limited success. The government recently introduced a 0.2% transaction tax on gold purchases not made through banks. This has simply driven more investors away from formal channels, pushing them toward physical holdings purchased through private transactions.<\/p>\n","protected":false},"excerpt":{"rendered":"

Turks have billions of dollars in gold “under their pillows.” The Turkish central bank estimates that Turkish households hold more than $311 billion in unregistered gold, most of it outside the official financial system. The central bank calculated this amount by adding the current quarter’s gold production and imports to the reserves from the previous period and then subtracting gold … Read More<\/a><\/p>\n","protected":false},"author":3,"featured_media":7116,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-7115","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-senza-categoria"],"_links":{"self":[{"href":"https:\/\/www.investorofemet.it\/en\/wp-json\/wp\/v2\/posts\/7115","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investorofemet.it\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investorofemet.it\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investorofemet.it\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investorofemet.it\/en\/wp-json\/wp\/v2\/comments?post=7115"}],"version-history":[{"count":0,"href":"https:\/\/www.investorofemet.it\/en\/wp-json\/wp\/v2\/posts\/7115\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investorofemet.it\/en\/wp-json\/wp\/v2\/media\/7116"}],"wp:attachment":[{"href":"https:\/\/www.investorofemet.it\/en\/wp-json\/wp\/v2\/media?parent=7115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investorofemet.it\/en\/wp-json\/wp\/v2\/categories?post=7115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investorofemet.it\/en\/wp-json\/wp\/v2\/tags?post=7115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}