Turkey exports $118 million worth of gold to Iran despite Western sanctions

In February, Turkey exported $117.9 million worth of gold to Iran for natural gas, despite tight sanctions imposed by Western nations. In Total, Turkey’s export of gold has increased 18 percent to $551.6 million in February, up from $466 million a month prior.

Since Turkey cannot pay for energy sources in U.S. dollars or euros, it pays for imports with Turkish liras. After the transaction is completed, Iran uses the liras to purchase gold and perhaps other precious metals. Turkey’s monthly gold sales to Iran peaked at $1.8 billion this past summer, which is significantly higher than February’s figures.

Iran has become an outcast in the international banking system because of sanctions that are heightened each year by the Western community over its nuclear program. Officials in the United States have attempted to stop Turkish officials from giving Iran a financial sustenance.

According to data published by the Turkish Statistics Institute (TSI), reports Reuters, Ankara did not sell gold to Tehran in January because of the implementation of U.S. sanctions that would tighten restrictions on precious metal sales.

However, the U.S. provided Turkey with a six-month waiver that exempted it from the sanctions on Iran. The deal is set to expire this summer and banks and dealers that handle precious metals are proceeding with caution.

“Due to the sanctions, nobody wants to attract attention. That may be the reason why exports stopped to Iran in January,” said an anonymous Istanbul gold trader in an interview with the news organization. “However, trade with Iran continues; there will always be transfers. Looking at this year’s figures, the February exports to Iran are quite low, so it shouldn’t cause issues.”

Over the past number of years, Turkey has become utterly dependent on imported energy. Although it ceased trade in January with Tehran, it has made it clear that it must continue to acquire its energy needs from Iran.

In the morning trading session, gold was inching towards the $1,600 mark as it was up $0.70 (at the time of this writing) to $1,596.40. Silver is down 41 cents to $27.91.

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