Gold prices in Egypt increased by roughly 17% in a month, and the gold pound coin hit an all-time high of more than EGP 26,000, indicating a global increase in gold prices and growing demand from Egyptians trying to preserve the value of their financial resources.
“There is a huge demand pressure currently in the market, as citizens are hedging against inflationary pressures, which resulted in unjustifiable historic prices in gold,” Nagi Farag, gold trade advisor to the minister of supply and internal trade, told Ahram Online.
The per-gram price of 24-carat gold reached EGP 3,726 on Tuesday, an all-time high, up from EGP 3,189 a month earlier, according to Egypt Gold Price Today.
The increase comes despite Egypt’s annual headline inflation decelerating to 36.4 percent in November, the best figure in six months. However, the figure is still well above 21.5 percent in the same month of 2022.
The price of a gold pound coin soared to EGP 26,080 today for the first time from EGP 22,320 on the same day last month.
“The rise in local gold prices is also the result of the recent increase in global gold prices,” Farag stated.
The global rise coincides with a decline in the US dollar and bond yields, spurred by mounting speculations that the Federal Reserve might opt for an interest rate cut in March.
By Tuesday 1:36pm, Cairo time, gold spot recorded $2,063.65 per ounce, up from $2,045 on 26 November, and $1,985 on 26 October.
Among the factors that pushed up global prices is Israel’s war on Gaza; prices were as low as $1,833 on 6 October, just one day before the war started.
Talking to Ahram Online, market expert Hani Adel ascribed the increase in local gold prices to the increase in the USD value against the EGP in the parallel market, which is used as a base for pricing gold in Egypt.
The USD rose to more than EGP 52 in the parallel market on Tuesday from EGP 49.9 a month before, per parallelrate.org.
In May 2023, gold prices were increasing in Egypt and the 24-carat reached EGP 2,742, which was a new peak at the time. In response to the disruption in the market caused by a surge in demand, the Egyptian government launched a zero-custom initiative for gold imports by Egyptians abroad for six months, which was extended for another six months in November.
“The market is affected by the forces of supply and demand. Therefore, it is hard to control by interference,” Adel suggested.
As a silver lining, Farag expected prices to decline at the beginning of 2024, as expats holiday season begins ahead of the Holy Ramadan month.
