The rise in gold prices does not go unnoticed…

Although I’ve always said that gold is an investment instrument of the professionals, average middle aged Turkish women made satisfying profit so far by investing in gold. Despite the occasional decline in gold price per gram, it generally showed an upward trend. However, a tiny analysis wouldn’t hurt I think.

As now that we have left the first few days of the first trading week of 2020 behind us, we notice an increase in gold prices both in domestic and forging markets.

Along with the recent political and diplomatic event in the United States and the EU, ongoing conflicts in different places in the worlds as well as Iran’s sudden counter manoeuvre in the Middle East have all causes a sharp rise in gold prices.

Remaining at a level of USD 1290 in the same period last year, Gold hits USD 1530 today. With a simple calculation, gold investors increased their profit by 18%. Considering the fact that a foreign investor faces the reality of nearly zero interest rate, making such large profit in just within a year does not go unnoticed.

On the other hand, Turkish investors seem to have made even larger profits. Standing at a level of TRY 223 in the same period last year, gold is being traded today at around TRY 290, which means a 30% profit for those who invest in Turkish lira. It’s a considerably high profit margin even for Turkey, I must say.

“Keeping track of gold…”

Gold per gram caused its investors suffer losses only twice in a total of 5 years: in September 2018 and May 2019. It fell back to TRY 200 after touching a record high of TRY 250, and then it kept going up and up. But surely a 20% loss in 7 month must confuse some of the investors, causing them to say goodbye to gold ventures. This situation however was only the result of a sharp decline in the rapidly increasing US Dollar to Turkish Lira exchange rate.

In short, gold has started to gradually increase both in domestic and foreign markets after a long period of sleep. Though not triggered by exchange rates, market movements abroad are causing prices in Turkey to rise up further.

If geopolitical risks of the new period not addressed soon, gold prices in foreign markets will quite likely continue to increase. And the fact that USD/TRY duo keeps rising in Turkish markets despite all efforts to prevent it from going up any further is an indication that the price of gold per gram will rise as well. But, as I always say, when it comes to such types of investments, you should make profit when you buy, not when you sell. Avoid acting like those types of investors who tend to buy when the instrument is rising and tend to sell when it is going down.

You hear me saying, “We’ll keep close track of gold trend” on television all the time. I intend to continue with this analysis over the upcoming weeks.