Mayhem at Closed Bazar: Multiple prices, waiting lines for gold

Grand Bazaar gold mystery: Shortage or sellers holding back?

Summary:
A sharp drop in gold prices has triggered a surge in physical demand across Türkiye, leaving buyers struggling to find gram and quarter coins in Istanbul’s Grand Bazaar. While officials insist there is no supply shortage, market dynamics suggest a different reality: inventory exists, but sellers are reluctant to part with it at lower prices.

Price drop sparks buying frenzy

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Gold prices have fallen sharply despite ongoing geopolitical tensions in the Middle East, prompting a wave of retail demand in Türkiye.

• Gram gold, which had surged above 8,000 lira at the start of the conflict, dropped to around 6,000 lira
• The decline was widely seen as a buying opportunity

As a result, retail investors rushed to jewelry shops and the Grand Bazaar, quickly depleting visible inventory.

“No gold available” — or just not for sale?

The most sought-after products—gram gold and quarter coins—have become increasingly difficult to find.

Yet officials from the state mint insist there is no structural shortage:

“Demand has increased, but not to a level that would strain production. If needed, we can move to multiple shifts.”

They note that jewelers can obtain gold through the official system on the same day.

This raises a key question:
If supply exists, why can’t buyers find gold?

The real issue: Pricing behavior

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Industry insiders point to a more nuanced explanation.

Many jewelers are reluctant to sell inventory purchased at higher prices after the recent drop in gold.

“They don’t want to sell high-cost stock at lower prices. That’s the main issue,” one official said.

In practice:

• Inventory exists but is withheld
• Sellers wait for better pricing
• Buyers face the perception of a shortage

On the ground: Delays and patchy availability

A closer look at neighborhood jewelers reveals a fragmented picture:

• Some shops have gram gold but no quarter coins
• Others show the opposite
• In many cases, customers must wait hours for supply

One long-time jeweler in Istanbul said:

“We were caught off guard by the surge in demand after the holiday. Prices dropped quickly and stock ran out. We’re restocking, but it takes time.”

Why gram gold is harder to find

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There are also structural factors behind the shortage of small-denomination products:

• Türkiye’s domestic gold production does not meet total demand
• Recycled gold supply is insufficient
• Import quotas limit additional inflows

Additionally:

• Producing gram gold is more costly than larger bullion
• Jewelers prioritize higher-margin products such as bracelets

As a result, gram gold often becomes a secondary product in supply chains.

Inside the Grand Bazaar: “Any quarter coins?”

The dominant question echoing through the Grand Bazaar:

“Do you have quarter gold?”

Observations from the market:

• Long queues form outside shops with available stock
• Some shops report “no gold” at all
• Others offer newer coins at higher prices

Indicative prices:

• Quarter gold: 11,560 – 11,750 lira
• Gram gold: around 6,500 lira

Sellers hold the advantage

Perhaps the most striking feature of the current market is the shift in bargaining power.

Those holding gold enjoy significant leverage:

• They can shop around for better buyback prices
• Different shops offer varying rates
• Selling prices can exceed 11,000 lira depending on timing

In contrast, buyers often face queues and limited availability.

In effect, those with gold are “kings,” while buyers compete for access.

Analysts warn: Stay cautious

Despite renewed interest, analysts urge caution.

Seda Yalçınkaya Özer, research director at Integral Investment, notes:

• Gold remains a strategic long-term asset
• Short-term direction remains uncertain

Key risks include:

• Delayed rate cuts
• Stronger dollar dynamics
• Elevated bond yields

Since gold does not yield interest, rising rates tend to weigh on investor demand.

Source:  Hurriyet Daily