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Rising gold prices battering Grand Bazaar merchants
Nobody will be able to halt the upward trend in gold prices, he argued, expressing views on the recent developments in the gold market to the Anatolia news agency on Wednesday. “Usually, Turks buy gold if prices start declining; however, if there is high demand for gold in international markets, this has a strong impact on the domestic market, causing prices to go up,” Fırat explained.
In addition, the increasing prices are causing serious problems for gold traders, with a number of stores in the Grand Bazaar forced to close down, he said. Fırat noted that in recent times gold traders have been unable to sell gold. Instead, people are flocking to them to sell their gold to take advantage of the already-too-high prices. “Sales come to a halt when gold prices go up, and we are currently passing through a period of stagnation. [In addition to the wedding season] the tourism season has also started; however, things are getting worse at a time when we were expecting brisker sales.”
The Grand Bazaar has a total of 3,600 stores, with 1,100 of them jewelers as of 12 months ago. However, this number has now dropped to 950 with the unstoppable rise in gold prices during the last year, he pointed out.
Fırat said leather, fur and souvenir sellers are taking over the vacated jewelry stores.
The situation is impinging on store rents, too. For instance, rents were usually paid in gold up until recently, but the storeowners now want payment in lira or dollars. Or in some cases, the proprietors have had to lower rents from, say, 5 kilos of gold per year to 4 kilos.
Jewelry stores in the Grand Bazaar may start campaigns such as offering gifts to gold buyers to increase their sales as the large gold companies are selling gold materials in installments at the spot price.
In addition to this, the cost of designing individual pieces of jewelry may be lowered to 10 to 15 percent of the total price from its current level of 20 to 25 percent, he noted, making prices more acceptable for potential purchasers.
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