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Gold trading volumes double in Turkey amid currency crisis

(Bloomberg) — First Turkish President Recep Tayyip Erdogan argued citizens should buy gold, then he said sell. Add dramatic swings in the lira, and the country’s traders are now enthusiastically doing both.

Gold futures volumes have surged on the Borsa Istanbul as the volatile currency attracts speculation and after the lira’s plunge boosted the local price of metal. The 90-day average daily volume more than doubled to 40,000 contracts, from about 17,000 in March. During the same time, the value of an ounce of gold in lira rocketed more than 30 percent.

“It definitely would make sense to own gold now in Turkey given the depreciation of the lira,” Jonathan Butler, precious metals strategist at Mitsubishi Corp U.K. Plc, said by phone. “This is consistent with gold’s status as a safe haven and will likely be mirrored on the physical market with demand increasing for jewelry and gold bars.”

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