Egypt’s gold market is experiencing a a decrease in sales and falling prices despite a rise in the global price of gold per ounce. This situation, confirmed by Rafiq Ibrahim, former head of the Gold Merchants Syndicate, highlights the complex interplay between global trends and local market dynamics.
The primary culprit seems to be a lack of demand. Lower sales have prompted raw gold merchants to export their stock, pushing local prices down below the world price in order to secure a profit margin.
Ibrahim explains the consumer psychology at play: rising prices typically spark buying sprees, while stable or falling prices lead to a wait-and-see approach. This can create a sluggish market, or even stagnation, as observed currently.
However, the export trend could pose a risk. If demand picks up and citizens hold onto their gold, a local gold stock shortage might emerge. Additionally, Egyptians traditionally hold a significant amount of gold at home. When they choose to sell for profit or liquidity reasons, it further adds to the supply in the market.
Ibrahim warns of “supply shortage crises” if increased demand coincides with a continued halt on imports.
This situation underscores the unique factors affecting Egypt’s gold market. While global forces influence the price, local buying behavior and merchant strategies ultimately determine the market’s health.
