Turkey, the world's third-largest gold consumer and a center for jewelry manufacturing, was badly hit by the financial crisis. Imports plunged to 37.6 tons in 2009 from 166 tons in 2008 and a 10-year high of 269.5 tons 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 jewelry in both domestic and global markets. Diminishing domestic demand on the one hand and shrinking foreign markets have caused jewelry 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  reached historic highs of $1,430.95 an ounce on Dec 7.

"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 tons 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 tons, he said.

"People sell some of their gold jewelry at high prices during these periods; in other words they contribute to scrap gold supply. However, the tradition of giving and receiving gold jewelry continues, so stock will climb to old levels in time."

This year 113,24 tons of gold and 385 tons 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.