Business owners of jewelry stores situated in Istanbul’s Kuyumcukent shopping mall along with their sales staff have criticized the investment habits of the Turkish public, claiming that many investment decisions are made on the basis of rumor, leaving jewelry businesses in difficult straits.
Speaking to Sunday’s Zaman, craftsmen and jewelers complained about Turkey’s unorthodox relationship between demand and the price of gold, citing widespread decisions to purchase gold when the price is rising and refusing to invest while the price is in decline.
Turkish society’s culture of investing in gold rarely lets dealers down, but an increase in demand for pure gold in recent years has demonstrated that the Turkish public is differentiating between the investment value of gold and its aesthetic value as jewelry. In addition to an overall decline in sales of gold fashion jewelry, unpredictable reactions to price changes are making it difficult to predict customer behavior.
Although gold represents a safe investment for even low-income buyers, the decline in expected sales of fashion gold jewelry is worrying craftsmen and jewelers who spend a lot of time developing and showcasing products. Many in the industry believe that the decline is encouraging craftsmen to work even harder in order to produce a wider variety of jewelry, target different tastes and draw well deserved attention to the jewelry industry.
According to Ali Rıza Haliç, store manager of Ertan Tunçbilek Jewelry, as discrimination between the investment potential and sentimental value of gold jewelry increases, the level of creativity invested in the production of jewelry increases, too. Haliç said: “The gold industry used to produce between 10 to 15 different kinds of wedding rings, but increased mechanization in the industry has enabled jewelers to offer customers a wider range of designs. As wearing jewelry becomes more common, customers are looking for unique pieces.”
Store owner Galip Ertan also agreed that the decline in fashion jewelry sales has stimulated creativity and said, “Craftsmen are putting more emphasis on design in order to cope with diverse customer demand and to catch up with design trends in the jewelry world.”
The high price of fashion jewelry could also be contributing to the decline in sales. Haliç cited the rise in demand for silver and artificial gold jewelry as an example of this trend.
He mentioned that the jewelry industry is dedicated to expanding its horizons in order to reach world standards of design and to make gold jewelry more wearable for all ages and cultures, especially in the West. Ertan mentioned how many innovations in gold jewelry are being made to satisfy customer demand and said, “By combining new designs with a smaller amount of gold we have made it possible for more people to be able to afford gold jewelry.”
“A decline in sales inevitably forces a business to dismiss workers,” said a production manager at a Kuyumcukent workshop. He added, “The employees are the first sacrifice we have to make, and employment can fall by 30 percent during low season.” Haliç also agreed and said, “Workshops either discharge their workers or offer them ‘under the table’ work in order to avoid paying insurance.”
Unfortunately, as is the case in many industries, the employees suffer the most when business is poor. Some workers from Kuyumcukent’s workshops and jewelry stores urge buyers to make their decisions without being affected by speculative hearsay. One worker argued: “Turks do not know how to invest in gold, but everyone claims they are an expert on the issue. Buyers need to start making careful decisions and ignoring the rumors.”
When asked about how a possible military operation by the West against Iran might affect gold prices and its sales, Haliç stated he doesn’t agree with rumors that people will rush to buy gold. He added: “Gold is just a metal. If the issue with Iran turns becomes a war, gold won’t bring happiness to anyone.”
Business owners at Kuyumcukent mall expect the price of gold to pick up by the middle of 2012, predicting the price of an ounce of gold to rise to between $1,300 and $1,750 over the course of the year. A trader at the mall noted that gold prices have been rising for the last 12 years and concluded that by the middle of the year gold will continue to be an important medium of investment since prices are expected to pick up by that time.
On Wednesday, the Istanbul Gold Exchange (IAB) released statistics on the gold trade in Turkey. According to the IAB, imports of gold rose by 88 percent in 2011 compared to the previous year. The figures show that the demand for gold-backed funds has been recovering since last year and remains strong. The amount of gold-backed funds increased from 8.2 tons in 2010 to 15.8 tons in 2011, with a total value of $800 million. The report also showed jewelry exports rose by 27 percent from $1.09 billion in the January-November 2010 period to $1.38 billion during same period of 2011.
Turkish society’s culture of investing in gold rarely lets dealers down, but an increase in demand for pure gold in recent years has demonstrated that the Turkish public is differentiating between the investment value of gold and its aesthetic value as jewelry. In addition to an overall decline in sales of gold fashion jewelry, unpredictable reactions to price changes are making it difficult to predict customer behavior.
Although gold represents a safe investment for even low-income buyers, the decline in expected sales of fashion gold jewelry is worrying craftsmen and jewelers who spend a lot of time developing and showcasing products. Many in the industry believe that the decline is encouraging craftsmen to work even harder in order to produce a wider variety of jewelry, target different tastes and draw well deserved attention to the jewelry industry.
According to Ali Rıza Haliç, store manager of Ertan Tunçbilek Jewelry, as discrimination between the investment potential and sentimental value of gold jewelry increases, the level of creativity invested in the production of jewelry increases, too. Haliç said: “The gold industry used to produce between 10 to 15 different kinds of wedding rings, but increased mechanization in the industry has enabled jewelers to offer customers a wider range of designs. As wearing jewelry becomes more common, customers are looking for unique pieces.”
Store owner Galip Ertan also agreed that the decline in fashion jewelry sales has stimulated creativity and said, “Craftsmen are putting more emphasis on design in order to cope with diverse customer demand and to catch up with design trends in the jewelry world.”
The high price of fashion jewelry could also be contributing to the decline in sales. Haliç cited the rise in demand for silver and artificial gold jewelry as an example of this trend.
He mentioned that the jewelry industry is dedicated to expanding its horizons in order to reach world standards of design and to make gold jewelry more wearable for all ages and cultures, especially in the West. Ertan mentioned how many innovations in gold jewelry are being made to satisfy customer demand and said, “By combining new designs with a smaller amount of gold we have made it possible for more people to be able to afford gold jewelry.”
“A decline in sales inevitably forces a business to dismiss workers,” said a production manager at a Kuyumcukent workshop. He added, “The employees are the first sacrifice we have to make, and employment can fall by 30 percent during low season.” Haliç also agreed and said, “Workshops either discharge their workers or offer them ‘under the table’ work in order to avoid paying insurance.”
Unfortunately, as is the case in many industries, the employees suffer the most when business is poor. Some workers from Kuyumcukent’s workshops and jewelry stores urge buyers to make their decisions without being affected by speculative hearsay. One worker argued: “Turks do not know how to invest in gold, but everyone claims they are an expert on the issue. Buyers need to start making careful decisions and ignoring the rumors.”
When asked about how a possible military operation by the West against Iran might affect gold prices and its sales, Haliç stated he doesn’t agree with rumors that people will rush to buy gold. He added: “Gold is just a metal. If the issue with Iran turns becomes a war, gold won’t bring happiness to anyone.”
Business owners at Kuyumcukent mall expect the price of gold to pick up by the middle of 2012, predicting the price of an ounce of gold to rise to between $1,300 and $1,750 over the course of the year. A trader at the mall noted that gold prices have been rising for the last 12 years and concluded that by the middle of the year gold will continue to be an important medium of investment since prices are expected to pick up by that time.
On Wednesday, the Istanbul Gold Exchange (IAB) released statistics on the gold trade in Turkey. According to the IAB, imports of gold rose by 88 percent in 2011 compared to the previous year. The figures show that the demand for gold-backed funds has been recovering since last year and remains strong. The amount of gold-backed funds increased from 8.2 tons in 2010 to 15.8 tons in 2011, with a total value of $800 million. The report also showed jewelry exports rose by 27 percent from $1.09 billion in the January-November 2010 period to $1.38 billion during same period of 2011.
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