New U.S. Sanctions To End “Turkey’s Game Of Gold For Natural Gas”

US Sanctions may create more turbulence in the Middle East.

Today’s AM fix was USD 1,741.00, EUR 1,347.00, and GBP 1,087.38 per ounce.
Yesterday’s AM fix was USD 1,747.25, EUR 1,349.54, and GBP 1,090.46 per ounce.

Silver is trading at $33.80/oz, €26.32/oz and £21.23/oz. Platinum is trading at $1,605.00/oz, palladium at $652.25/oz and rhodium at $1,065/oz.

Cross Currency Table – (Bloomberg)

Gold and silver appear to be consolidating after their recent gains. Gold fell $7.10 or 0.41% in New York yesterday and closed at $1,741.30. Silver slipped to a low of $33.92 and finished with a loss of 0.23%.

Gold remains unchanged on Wednesday and is likely being supported by the realisation that the Greek bailout deal may not be the success it was hailed to be, and also the time is running out for negotiations on the US fiscal cliff.

Gold Spot $/oz, 2007-2012 – (Bloomberg)

Gold prices will rise in 2013 Citi has said and gold remains one of their favoured commodities.

Despite some investors turning less bullish on gold, Citi continues to be bullish on gold in 2013. President Obama’s victory was expected to be positive for gold since it would benefit from “a continuation of dovish monetary policy”. Gold prices have also been supported by central bank gold purchases. Moreover muted gold demand in India is expected to have picked up during Diwali.

Silver Spot $/oz, 2007-2012 – (Bloomberg)

The yellow metal’s appeal is still strong as evidenced by recent investments by Soros, Paulson and other respected hedge fund managers. This buying and buying by other institutions such as PIMCO has led to continuing growth in holdings of the SPDR Gold Trust, the world’s largest gold-backed ETF, which hit a record high of 1,345.813 tonnes on November 27th.

Global gold ETP holdings have climbed to a record for an eighth straight session showing robust demand for gold. The amount in exchange-traded products backed by the metal rose 0.2% to 2,612.1 metric tons, data tracked by Bloomberg showed.

Total Known ETF Holdings of Gold, 2002-2012 – (Bloomberg)

In its weekly note on technicals, Commerzbank said gold is supported by a short-term uptrend at $1,735. “We will retain our bullish view while the current November low at $1,672.50 underpins,” it said in its note picked up by Thomson Reuters.

“Support above this level can be seen at $1,739.09/$1,737.17 (9 November high and late September low) as well as around the mid-November $1,705.66 low and around the minor psychological $1,700 mark. Only if unexpectedly fallen through, would our short term bullish view be neutralised.”

Currency wars are set to intensify as the US Senate is considering new sanctions against Iran that would prevent Iran getting paid for its natural resource exports in gold bullion.

The new sanctions aimed at reducing global trade with Iran in the energy, shipping and precious metals sectors may soon be considered by the U.S. Senate as part of an annual defense policy bill, senators and aides said on Tuesday, according to Reuters.

The sanctions would end “Turkey’s game of gold for natural gas,” Reuters reported a senior Senate aide as saying, referring to reports that Turkey has been paying for natural gas with gold due to sanctions rules.

The legislation “would bring economic sanctions on Iran near de facto trade embargo levels with the hope of speeding up the date by which Iran’s economy will collapse,” the aide said.

Last week Turkish Deputy Prime Minister Ali Babacan has revealed a critical detail about a widely discussed Turkey-Iran gold trade boom, disclosing that the Islamic republic was exporting gas to Turkey in exchange for payment in gold bullion.

It is also reported that Iranians are buying Turkish gold with the Turkish Lira, which is deposited into their bank accounts in exchange for Turkey’s natural gas purchases, the deputy prime minister said at midnight Nov. 22 during a parliamentary session.

Iran cannot transfer monetary payments to Iran in U.S. dollars due to U.S sanctions against the country’s alleged nuclear weapons program.

Iran has been forced to shun the international financial system and the petrodollar as means of payment and turn to the international gold market to ensure it gets paid for its natural resources in order to prevent absolute economic collapse.

The law of unintended consequences may apply here and should the Iranian currency and economy collapse there is likely to be a war with Israel and turbulence in the Middle East akin to, if not worse, than that seen in the 1970’s.

8 comments on “New U.S. Sanctions To End “Turkey’s Game Of Gold For Natural Gas”
  1. Bruce says:

    Gold at 1717.70 as I write this.

  2. Danny Cunnington says:

    The problem with these sanctions are that they are unilateral US sanctions and not UN sanctions. They have no legitimacy on an international basis. The US can threaten Turkey but the Turkish government is already caught between a rock and a hard place. Russia has already cancelled a gas supply deal with Turkey over it’s illegal hi-jacking of a passenger jet. If Turkey can’t get Iranian gas then there will be an energy crisis which will severely damage the economy.

    Turkey has been the main NATO country to openly become implicated in harbouring and supplying terrorist gangs to destabilise Syria. The goal is regime change but it hasn’t worked for the last 18 months. Turkish law courts are already drawing up criminal charges against the government. Nothing will happen here unless the rebels are defeated at which time the government has also failed. This leads to implications with negative effects for Turkey especially from Russia, China and Iran.

    IMO Turkey can’t afford to cut off Iranian gas.

  3. Marc Authier says:

    Turkey cant get along economically without cheap natural gas. US is sum is demanding Turkey to suicide itself for Israel and US. I rectify her. For Bibi not for the whole of Israel but the bunch of crooked neocons controlling USA Israel and most of Europe. Oh by the way. BUY OIL and GAS I must add. Uncle Sam that rotten chatacter is making you a present today. BUY PHYSICAL SILVER CRASH JP MORGAN and the USA.

  4. Al Kyder says:

    OK Reality check. mark obryne & danny cunnington

    1. There will be no war with Israel. Israel can not attack Iran They would have already if they could.
    2. Forget about gas, If the price of Oil drops below 84.99 per barrel, Iran will start the war. I guarantee it. They will do one of two things either hit every USA target fast and hard, then block the Straits of Hormuz, hunker down and wait for the response.
    3. Or.. they will flatten Qatar and tell the USA that they are waiting for the response.
    4. Iran will test a nuclear device and that will be the end of hostilities.

    Turkey is destabilising Syria because they dont want the Iran Iraq Syria Lebanon pipeline to go through. The deal has been done construction has started. I’m not sure what Europe thinks of this, I would assume they would be more than happy to have Iran as another supplier in the Med. I know the Spanish and Repsol would love it. Israel, would hate it. Turkey would hate it more.

    You have to remember the Turks have been playing this game for a long long time. Look at the way they kicked Israels arse with that Flotila thing. That was payback for Israels failure regarding the Baku Tablisi Ceyhan pipeline security deal, and for the betrayal by Condi Rice of Kirkuk.

    What Turkey is doing is killing two birds with one stone. Turkey knows the Kurds are the agitators in this Syrian thing, dont be fooled, and they know the Kurdish militias are Israels baby. They get to destabilise Syria, at the same time, get an inside line on these Kurds. THey will crush the Kurds later, and blame Israel for betraying them, thus the Kurds will never trust a jew again, the Kurds who pretend to be some Muslim sect, will inflame the muslim world, and Israel will get punished by them.

    You gotta love Tayyip Erdogan , with that Gaza flotila thing, without firing a single shot, he destroyed Israels hopes of every becoming energy independent, of having reliable water, which was to come from the Tigris rivewr, and from having fibre optic lan lines. He also got Kirkuk, which belongs to Turkey anyways, not Iraq, and is an indeginous home of Turkomens not Kurds as Americans like to think.

  5. daddy warbucks says:

    History is trying to repeat itself, will the internet stop them?

    The Ron Paul of Europe Exposes Globalist Tyranny

    Marxist Now Taking UKIP Members Children!

    Secrets of Communism – Mass Murder

    Stalin’s Secret Police: I

    Chekist / Чекист – фильм режиссёра Александра Рогожкина (Chekist / security officers- a film directed by Alexander Rogozhkin)

  6. Silver Phoenix says:

    What socialist teach the mush brains in universities.

  7. Lowell L Morse says:

    Turkey IS PLAYING the US and RUSSIA. End game, Turkey goes to Russia.

  8. SandVelder says:

    Dear Americans

    I never thought it would come to this. I have so many friends and family residing in the States, being perfectly happy there. But alas, what they and the US-public do not realise, is that their government has become an international terrorist organisation.


    Who the Foxtrot gives this terrorist organisation the right to impose “sanctions” on each and every country who they deem not to play ball according to their own dumbfounded rules. In 2011 I called them the Narcissistic States of America, and they keep on confirming this label time and again.

    In stead of getting their own house in order, they concentrate on other countries which they can pillage for their own good. They develop military muscle in order to maintain their bully-on-the-block status.

    My question is: What will happen if the USA retract their global presence from their USAID offices, military bases (150 of them outside the US, apparently), their CIA operators, occupying troops etc.etc.etc? Will they suddenly disappear if they do not keep their global presence up? Their neighbour Canada is not meddling as much in everybody’s affairs, and they still seem to be in the same place. What will happen if the US-Gov actually starts RESPECTING the sovereignty of other countries? Quite a novel idea for them, I suspect…