Gold deposit accounts in banks skyrocket

The price of gold, considered a safe haven in investments, has broken records one after another since last year, while the number of precious metal deposit accounts kept in banks are on a rise in parallel with President Recep Tayyip Erdoğan's call on people to convert their foreign exchange savings into gold or Turkish lira in an attempt to help boost the value of the Turkish lira. Having broken successive records since last year, gold became one of the favorite investment instruments in 2016 again.

According to Banking Regulation and Supervision Agency (BDDK) data, gold deposit accounts in banks soared to TL 16.964 billion ($4.54 billion) at the end of 2016 from TL 10.624 billion at the end of 2015. As far as the last one year's transactions are concerned, this figure corresponds to 51.6 tons of gold, based on the average gold price of TL 122 per gram.

A total of TL 15.922 billion worth of gold deposit accounts belonged to natural entities, while TL 1.042 billion worth of them belonged to commercial institutions and others in 2016.

Highest monthly figures seen in DecemberThe highest increase in precious metals deposit accounts occurred in December 2016 upon Erdoğan's call on people to convert their foreign exchange savings into gold or Turkish lira.

The size of precious metals deposit accounts surged nearly to TL 17 billion at the end of December from TL 12.767 billion at the end of November. The rise in December alone stood at TL 4.197 billion.Speaking to Anadolu Agency (AA) about the rise in precious metals deposit accounts, İş Yatırım banking analyst Kutluğ Doğanay said Erdoğan's call might have a role in the rise.

Expressing that gold prices declined until December in the second half of the year, Doğanay explained that many people who missed the first movement considered the critical levels in December to be an opportunity to open gold account deposits.He pointed to the possibility that expectations for the U.S. Federal Reserve's (Fed) interest rate hike and future steps might have supported the demand for gold, saying there were many reasons for various financial segments to invest in gold in December.