Gold Price Rises as Turkey Promises to Save Financial Crisis Amid Lira Collapse

Investing.com – Gold prices picked up to above $1,200 on Tuesday after hitting a 17-month low in the previous session, as Turkey vowed to save the lira crisis on late Monday.

The Comex division of the New York Mercantile Exchange showed that for December delivery rose 0.29% to $1,202.4 each troy ounce at 1:15AM ET (05:15 GMT).

Turkey’s central bank announced on Monday a series of measures to offer liquidity and cut reserve requirement for banks, in a bid to saving lira from its crisis driven by the U.S. sanctions and doubled tariffs on silver and aluminum for 50% and 20% respectively.

Equity markets slumped while investors seek refuge in safe haven currencies including the U.S. dollar and gold despite attempts by Turkey’s central bank to halt the crisis.

“Turkey is faced with an economic siege. We are taking the necessary steps against these attacks and will continue to do so,” President Erdogan said on Monday.

Finance Minister Berat Albayrak, Erdogan’s son-in-law, said Sunday said that Turkey would implement an economic action plan, but did not give details on what the steps would be.

Simon Derrick, chief currency strategist at BNY Mellon, remained pessimistic and said “It is hard to look at these announcements as being anything more than temporary calming measures, rather than solutions to the problems at hand.”

Elsewhere, India’s gold imports increased for the first time in seven months, reports on Tuesday revealed. The world’s second largest gold consumer purchased 75 tonnes last month, up by 44.2% year-on-year, according to reports.

“The recent rise in imports was due to stock building due to lower prices ahead of the jewellery show and in anticipation that the rupee may continue to weaken till 71 rupee,” said Cameron Alexander, Precious medals research company GFMS’s analyst.

The World Gold Council said earlier in August that the gold demand in India would improve in the second half of the year as the government is bolstering farmers’ incomes.

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