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By Behiye Selin Taner
ISTANBUL, Dec 31 (Reuters) - Turkey's gold imports are expected to rise to around 50 tonnes next year from 42.4 this year, still far below pre-crisis levels as high prices and low jewellery demand keep scrap supply high, Istanbul Gold Exchange Chairman Osman Sarac told Reuters.
Turkey, the world's third-largest gold consumer and a centre for jewellery manufacturing, was badly hit by the financial crisis. Imports plunged to 37.6 tonnes in 2009 from 166 tonnes in 2008 and a 10-year high of 269.5 tonnes in 2005.
In an e-mailed interview with Reuters on Friday, Sarac said gold imports were limited in 2010 also due to record high prices.
"High prices in recent years decreased the demand for jewellery in both domestic and global markets. Diminishing domestic demand on the one hand and shrinking foreign markets have caused jewellery exports and Turkish gold demand to fall in 2010", said Sarac.
Sarac said the exchange expected gold prices to continue a
strong trend in 2011. Gold prices
"Under current circumstances, the upward trend is seen continuing for at least another six months, and the price going up to around $1,500. There are even forecasts that put the price up to $1,650 by the end of next year."
Gold mine production in Turkey is seen rising to 20-30 tonnes in 2011 from around 13.7 this year, he said.
He also said market analysts and fund managers did not foresee that the financial markets would shrug off the effects of the global financial crisis in the short term.
Turkey's "under the mattress" gold stocks, or those held at home, are estimated to be around 5,000 tonnes, he said.
"People sell some of their gold jewellery at high prices during these periods; in other words they contribute to scrap gold supply. However, the tradition of giving and receiving gold jewellery continues, so stock will climb to old levels in time."
This year 113,24 tonnes of gold and 385 tonnes of silver changed hands on the Istanbul Gold Exchange as of Dec. 29, and Sarac said the exchanged expected a 10-15 percent increase in the trading volumes of both in 2011. (Writing by Ece Toksabay, editing by Jane Baird)