Turkey buys 62 tons of gold and Saudi Arabia 20 tons.. Bloomberg explains the reasons.

Turkey buys 62 tons of gold and Saudi Arabia 20 tons.. Bloomberg explains the reasons.

Bloomberg spoke of a transformation in the gold market and said that the market was undergoing migration, with Western investors getting rid of bullion while Asian buyers benefited from lower prices to buy it.

The agency said that higher interest rates

including in the United States, made gold less attractive as an investment, meaning that large quantities of metal were drawn from coffers in financial centres such as New York and headed east to meet demand in the Shanghai gold market or the Grand Bazaar in Istanbul.

Bloomberg noted that

the gold market cycle was repeated decades ago:

 when investors retreat and prices of precious metal fall, Asian purchases rise and precious metals flow to the east, and when gold rises again, many bullion return to pile into bank coffers on the streets of New York, London and Zurich.

Since gold prices reached a peak level in March

gold prices have fallen 18% 

with large rate hikes by the US Federal Reserve (US Central) triggering a mass sell-off by financial investors.

• According to data from CME Group Inc and London Bullion Market Association

• more than 527 tons of gold flowed from New York and London coffers

• coinciding with growing shipments to large Asian gold consumers such as China

• whose imports of the metal last August hit a 4-year high.

In addition to China's major purchasers of

precious metal Turkey and Saudi Arabia,

according to a graphic by Bloomberg, Ankara purchased 62 tons from May to August this year, while Riyadh acquired 20 tons of the metal.

The IAEA also noted that, despite the trend of much gold to the east, quantities were still insufficient to meet demand. 

Analysts said huge quantities of precious metals, which fuel Asia's appetite, come from coffers operated by CME Group, which supports Comex's New York futures market.