The goldsmiths division of the Federation of Egyptian Industries has clarified the truth of the vague and widespread statement that brought the Egyptian gold market to a standstill.
The latest statement attributed to one of the companies has caused widespread controversy in Egypt as it has included instructions to trade in the gold market following a mad rise in prices.
In response, Rafiq Abbasi, head of the Gold Works division at the Federation of Industries, denied the circulating news about the closing of the gold market in Egypt.
Abbasi commented to “Al-Masry Al-Youm” on the distribution of photos of the decision to close the gold market, saying: “This is one of the ‘Behrj’ and it is not possible to close the gold market in Egypt do not close. “
He pointed out that the gold market in Egypt is subject to supply and demand, and the “I SAGHA” website, which published the message “The market is closed due to price turbulence,” is a private website, and that Egypt not a gold exchange.
The head of the goldsmiths division in the Federation of Industries confirmed that the central bank can not issue these instructions because the market is subject to supply and demand.
He explained that it was allowed to import or export gold without customs, but the Central Bank stopped it, to preserve the dollar. He also mentioned that people in the current period accept to buy dollars and gold buy, which led to an increase in the price of gold.
He continued, “The traders in this situation are brokers between the seller and the buyer, and deny any allegations about the central bank’s interference in the market.”
The General Division of Jewelry Trade in the Federation of Chambers of Commerce and the Precious Metal Manufacturing Division in the Federation of Industries confirmed in a statement that the post circulating on some social media sites about stopping the gold trade movement was issued by a fictitious and unknown company not registered with the two divisions.
Why does Egypt buy gold?
At the same time, the Central Bank of Egypt last February announced the purchase of 44 tons of gold, bringing its total holdings by 54% and up to 125 tons, which is equivalent to 17% of the total Egyptian reserves, and this is the highest among the countries in the region.
Egypt topped the list of buyers in the World Gold Council’s report for the first quarter of this year, followed by Turkey, India and Ireland. However, Kazakhstan came in first place at the level of sellers, followed by Uzbekistan and then Qatar.
The council’s report is still the source of all this information about Egypt’s desire to buy gold to support the reserves, without any explanation from an Egyptian side with details that could help investors understand the monetary and economic policies of the Egyptian government. understand and alleviate the controversy – at least among experts – about the extent of the impact of this move, positively or negatively on the Egyptian economy.
The World Gold Council is one of the leading companies in the field of gold mining and was established in 1987 and is headquartered in London.
Experts have attributed the reasons for Egypt’s purchase of gold at the moment to the Egyptian government’s efforts to confront the repercussions of global inflation, and to bridge the gap that emerges after the exit of “hot money” from the Egyptian market to the first announcement of an increase in the US interest rate to $ 0.25%, which prompted the Egyptian government to sell shares of some companies and also receive some Gulf deposits to improve the cash reserve position in the country.
In a press release, a member of the Egyptian Society for Economics and Legislation, Dr. Mohamed Anis, indicated that Gulf deposits may be in gold and not in dollars, and in this case Egypt is sending a strong message to investors that its economy has the ingredients to withstand the global wave of inflation.
It should be noted that Egypt is also dependent, in its policy to increase the gold coverage in its cash reserves, on the Sukari mine, as Egypt produces almost 16 tons of gold annually, most of which through the Sukari mine in the Nuba desert is coming, according to statistics from the Egyptian Ministry of Petroleum and Mineral Resources. .
The Egyptian government’s interest in local gold production and the purchase of a quantity of it on a monthly basis from the company that owns the Sukari mining concession has increased since 2017, and this is reflected in its gold reserves.
In August 2021, Egyptian billionaire Naguib Sawiris predicted a decline in the stock market, saying that prices had been high for a very long time and would inevitably fall at some point, noting that the yellow metal was not immune to all market events. .
Sawiris acknowledged that high interest rates, which could come as economies recovered from the Corona crisis, would “eat up” gold’s profits, but he said he was a long-term investor in the yellow metal.
He said: “I want to go to bed at night and I’m not afraid of the stock market crash or the rise of a pandemic.” Sawiris also advised investors that a portion should be between 20% and 30% of the portfolio. gold, knowing that half of Sawiris’ wealth is investments in gold.
Sawiris’ La Mancha Holding Company announced at the end of last month the establishment of a fund to invest in gold to manage assets of more than $ 1.4 billion.
The gold price today in Egypt
And about gold prices today in Egypt, Saturday, May 7, 2022, the price of one gram of 24 carat gold in Egypt today was about 1120 pounds, and the price of one gram of 21 carat gold (the most traded in the markets) recorded today in Egypt about 980.07 pounds, and the price of an ounce of 18 carat gold today is recorded at 840.06 pounds.
And the price of an ounce (an ounce) today in Egypt was about 34,834 thousand pounds (1884 dollars), and the price of the gold pound today in Egypt (8 grams of 21 carats) was about 7841 pounds (424.08 dollars) recorded.
Gold prices in Egypt vary in different regions and calibers, where the value of craftsmanship (the trader’s wages for every gram in goldsmiths ‘) varies between 30 and 60 pounds in the goldsmiths’ areas, while for some traders it rises between 120 and 60 pounds. 150 lbs.