Gold News

Iran-Turkey Gold Trade Returns After Nuclear Sanctions Deal

"Certain" to resume, but "unlikely" to match 2012 levels or affect world gold market...
 
The GOLD TRADE between Iran and Turkey, which leapt as prices peaked in 2012, is set to return after Tehran agreed last weekend to curtail its nuclear research in return for an end to some UN Security Council-led sanctions.
 
The volume of Iran's gold trade with neighboring Turkey leapt from 1 tonne in 2011 to 126 tonnes in 2012, according to data from the International Trade Centre.
 
With US-led sanctions then taking hold internationally, Iranian suppliers of oil and natural gas accepted Turkish Lira bank deposits as payment, before using the money to buy gold.
 
The gold trade may also have been direct, with metal used as payment itself. Of the gold bought and held in Turkey, according to press reports, some was then shipped to Dubai and sold for foreign currency, effectively bypassing sanctions imposed by the UN.
 
Turkey's gold trade with Iran ended in February 2013 when new laws in Ankara, aimed at meeting international sanctions, tightened controls on gold and precious metals flows with its neighbor, and also stopped Turkish bank Halkbank from remitting payments for oil back to the Islamist state.
 
Stating that the cross-border flow of bullion will "certainly" resume as sanctions are lifted following Iran's nuclear deal with the UN Security Council's five permanent members and China, it was "due to the problems in money transfers in 2012 [that] the gold trade rose," the country's ambassador to Ankara, Reza Bigdeli, said today.
 
So with some UN sanctions on cash transfers also lifted as part of the $7 billion trade deal, perhaps commencing as soon as Decemeber, "I don't think that we are still in the same situation that would require us to trade in gold in those amounts."
 
For the global gold trade, agrees precious metals analyst Bernard Dahdah at French investment and bullion bank Natixis, "The lifting of sanctions should not have a significant impact.
 
"Iran is not a major consumer of the metal, nor is it expected to increase its gold imports to any significant degree."
 
Germany, formerly the largest trade partner with Iran, is expected to target exports of auto-parts, as well as medicine and medical devices for humanitarian aid, according to Reuters.

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