Turkey is a heavy energy user. And the country they depend upon for gas imports has been Iran. Turkey can only cut it's energy use just so much. Because of US sanctions which prevent Turkey from paying Iran in dollars or euros, Turkey has been paying Iran in lira, which Iran then uses to buy gold in Turkey and Iranian couriers take the gold back to Iran in carry on luggage or to Dubai where it is sold for foreign currency.
United States Congress passed more sanctions to try and prevent Turkey from buying anymore gas from Iran and in particular being able to send hard currency into Iran's economy. This produced tension between Turkey and the U.S. Turkey has been given a 6 month waiver from sanctions which will expire in July.
Gold Exports From Turkey - Total Amounts for the Year - 2012:
To Iran - $6.5 billion (more than 10 times the amount in '11)
To the UAE - $4 billion (up from $280 million in '11)
Gold Exports in '13:
Jan - $466 million (to Iran - $117 million) (to UAE - $402 million)
Feb. - $551 million (to UAE - $371 million)
But it is still lower than it was in July at the start of sanctions. ($1.8 billion)
"Due to the sanctions, nobody wants to attract attention. That may be the reason why exports stopped to Iran in January," said one Istanbul gold trader, asking not to be named.
"However, trade with Iran continues; there will always be transfers. Looking at this year's figures, the February exports to Iran are quite low, so it shouldn't cause issues."