Turkey, which is a US ally, is paying the price of the US imposed sanctions on Iran as its gold-for-gas trade with Iran is shrinking.
As per Reuters, U.S. officials have sought to prevent Turkish gold exports, which indirectly pay Iran for its natural gas, from providing a financial lifeline to Tehran, largely frozen out of the global banking system by Western sanctions over its nuclear program.
Turkey, Iran's biggest natural gas customer, has been paying Iran for its imports with Turkish lira, because sanctions prevent it from paying in dollars or euros.
Iranians then use those lira, held in Halkbank accounts, to buy gold in Turkey, and couriers carry bullion worth millions of dollars in hand luggage to Dubai, where it can be sold for foreign currency or shipped to Iran.
The gold exports from Turkey to Iran rose to $6.5 billion in 2012, more than ten times the level of 2011, while exports to the United Arab Emirates - much of it for onward shipment to Iran or conversion to hard currency - rose to $4.6 billion from $280 million.
However, due to the US sanctions, the Turkish bullion exports have fallen to 10.5 tonnes in December from 15.2 tonnes in November.