ISTANBUL – In the shadowed lanes of Istanbul’s historic Grand Bazaar, where the clink of gold and silver has echoed for centuries, a tense silence is falling. As global prices for precious metals skyrocket, Türkiye’s domestic market is buckling under the weight of record costs, paralyzing production, altering centuries-old trade patterns, and exacerbating the nation’s fragile economic climate.
Data from local market tracker Canli Doviz shows the stark reality: on Friday, gold soared to an unprecedented 7,049 Turkish liras ($162.7) per gram, a 0.68% daily jump. Silver hit a record 138 liras ($3.2) per gram. Since January, gold has climbed about 18%, but silver’s meteoric 39% surge underscores the volatility shaking the foundations of local trade.
Workshops Fall Silent, Uncertainty Reigns
For artisans and traders, these aren’t just numbers on a screen—they are a direct threat to livelihood. “Jewelry workshops are nearly at a standstill, and production has almost been halted,” said Resat Yilmaz, a gold trader in the Grand Bazaar. He estimates that soaring raw material costs, driven by investment demand, have led to a catastrophic 60% plunge in production.
The uncertainty is freezing the market. “It is impossible to predict what will happen tomorrow. Right now, everyone is worried—whether they are buying or selling,” Yilmaz told NYAZADAILY, describing a climate where both consumer purchasing and artisan production have ground to a halt.
The impact is vividly clear in Istanbul’s Kuyumcukent, one of the world’s largest jewelry centers. Can Korucu, a craftsman with three decades of experience, has been forced to shut down his workshop. “Escalating global tensions have driven up gold prices and raw materials costs, leaving workshops unable to cover basic operating expenses,” he said.
A Shift in Tradition: From Making to Buying
The crisis is fundamentally altering traditional market dynamics, particularly for silver. Sabri Demirci, a silver artisan, explained that the classic model of shops commissioning new pieces from workshops has collapsed. “People are increasingly selling their silver pieces as prices rise day by day. Many workshops have stopped taking new orders because silver shops are buying silver directly from individuals instead of commissioning new production,” Demirci said. He now survives on a dwindling list of private clients, as orders from jewelry shops have vanished.
The Macroeconomic Squeeze: A Vulnerable Lira Meets Global Turbulence
Behind the local distress lies a potent mix of global and domestic economic pressures. Murat Tufan, Research Director at Destek Portfolio Management, notes that ongoing trade tensions and geopolitical risks are pushing many nations, including Türkiye, to increase gold reserves to hedge against dollar dependence.
“For economies like Türkiye, where the local currency remains vulnerable, global turbulence translates into sharper price hikes at home,” Tufan stated. This vulnerability is stark: the Turkish lira has weakened 21.4% against the U.S. dollar since the start of 2025, sliding from 35.72 to about 43.37 per dollar. Tufan estimates the currency could depreciate by another 20% this year, further fueling the lira-price spiral for imported inflation and dollar-denominated commodities like gold.
The Bottom Line
The surge in precious metals is more than a financial headline in Türkiye; it is a slow-motion disruption of a deep-rooted cultural and economic sector. As global forces collide with local currency fragility, the Grand Bazaar’s bustling workshops risk becoming monuments to a bygone era. The situation poses a severe challenge to policymakers, who must stabilize the lira and curb inflation without crushing the traditional industries that employ thousands. For now, the gold continues to shine, but for Türkiye’s artisans, its gleam is increasingly out of reach.
