Iran Gold Imports Surge, Imported $1.2 Billion Of Precious Metals From Turkey in April Alone

Iran Gold Imports Surge – 1.2 Billion USD Of Precious Metals From Turkey in April Alone (ZeroHedge; June 5, 2012):

Turkish exports of gold, precious metals, pearls and coins to Iran rose to $1.2 billion in April from a tiny $7,500 a year earlier, according to figures released by the state statistics institute in Ankara yesterday.

This is a massive increase in demand and suggests that there may be official involvement in the imports from the Central Bank of Iran.

This trend continued in May when Turkish gold imports leapt by 150% in May due to unrelenting demand from sanction strapped Iran.

Turkey imported 19.47 tonnes of gold in May, up from 7.78 tonnes in April, according to data released by the Istanbul Gold Exchange on Friday.

Foreign trade data showed Turkey earned $1.27 billion from exports of 23.9 tonnes of gold in April, dwarfing the $75.4 million earned from sales of 1.65 tonnes last year. Some 95 percent of the total gold exports went to Iran in April.

Turkey’s gold imports in the first five months of the year totalled 35.18 tonnes, compared with 79.70 tonnes in 2011 and 42.49 tonnes in 2010.

Some of the increase was also attributable to the onset of the wedding season and regional tensions related to the 14-month-old uprising in neighbouring Syria. Although, official buying from Syria is not suspected.

The export data showed Iranian buying from Turkish gold traders has been the crucial factor.

Sanctions to force Iran to curb its nuclear programme have targeted its energy and banking sectors and new measures from both the United States and European Union take effect in July.

Indeed, Iran was prohibited from using the global payments system, SWIFT, by the US.

Iran announced last week that it has designed and implemented a replacement for the Society for Worldwide Interbank Financial Telecommunication (SWIFT,) which facilitates the bulk of global cross-border payments. SWIFT cut off Iranian banks blacklisted by the European Union over Tehran’s nuclear program in March after an EU order and pressure from the United States.

The chairman of a leading Russian bank has criticised the United States for imposing sanctions on Iran, stressing that the U.S. sanctions against the Iranian banking sector violate international laws.

The U.S. financial and economic sanctions against Iran violate the charter of the International Monetary Fund (IMF), which demands free trade between all member states, Chairman of Russian Vneshtorgbank (VTB) Andrei Kostin said on Friday.

The sanctions and economic war have made neighbouring Turkey an ever more important channel for the Islamic republic.

The scale of the buying suggests that some of the gold imports are official and possibly from the Central Bank of Iran.

Gokhan Aksu, vice president of Istanbul Gold Refinery, believes Iran is holding some of its oil revenues in gold.

Meanwhile ordinary Iranians are buying gold as a safe haven store of value as the rial currency is losing value and access to foreign currency was being choked off by Western sanctions.

Many Iranians are increasingly choosing to keep savings in the precious metal rather than paper currency.

In January the EU and US agreed to freeze the assets of the Iranian central bank and ban all trade in gold and other precious metals with the Iranian Central Bank and other public bodies in Iran.

Tehran announced at the end of February that it is ready to receive payment for oil supplies in gold as well as the national currencies of importer countries – according to Mahmoud Bahmani, Governor of the Central Bank of Iran.

According to IMF data, at the last official count (in 1996), Iran had reserves of just over 168 tonnes of gold. The FT reported in March 2011 that Iran has bought large amounts of bullion on the international market to diversify away from the dollar, citing a senior Bank of England official.

Currency wars continue and are set to deepen.

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