Trade in Turkish gold bars to Iran via Dubai is drying up as a growing number of banks and dealers refuse to buy the bullion to avoid the risks associated with Turkey’s gold-for-gas trade with Iran.
U.S. officials say they are concerned the trade between the two countries provides a financial lifeline to the Iran, which is largely frozen out of the global banking system by Western sanctions.
Increasing U.S. pressure has already created troubles for Turkish gold exporters. Many dealers in Dubai’s crowded and boisterous gold souk now refuse to take gold bars produced in Turkey. Some ask for a deep discount, saying their clients such as banks and other traders had suspended dealing with Turkish bullion over the past couple of months.The media spotlight on the gold-for-gas exchange has already helped push Turkey’s gold exports to the UAE to $621 million in November from nearly $2 billion in August, according to the latest official trade data.Turkey, Iran’s biggest natural gas customer, has been paying the Islamic Republic for oil and gas imports with Turkish liras, because Western sanctions prevent it from paying in dollars or euros. The couriers have been carrying the gold worth millions of dollars in their hand luggage to Dubai, where it can be sold for foreign currency or shipped to Iran.
A Turkey-based industry source said the fact that Iranians are buying Turkish gold and shipping it via Dubai has worried international banks and traders and prompted them to suspend trading in Turkish gold bars.
“This is not something declared. It has been going on very quietly for the past month. Some international banks have taken the lead in this and they are simply staying away from any gold bullion that is coming out of Turkey,” he added, Hurriyet Daily reports.