Traders attributed the reasons for this increase to the huge demand from Egyptians to buy in anticipation of a new drop in the exchange rate of the pound against the dollar. At the same time, there was a shortage of the supply of the precious metal after the Central Bank tightened the procedures for importing non-essential goods.
Dr. Nagy Farag, Advisor to the Minister of Supply for Gold Industry Affairs, said that the price of gold in Egypt witnessed huge price jumps during the past week, coinciding with the blessed Eid Al-Fitr holiday, which led to confusion in the market, but the buying and selling operations were organized without closing, contrary to what was reported in the rumors Social Media.
In exclusive statements to CNN in Arabic, Farag attributed the reasons for the rise in gold prices to the increase in the Egyptians' desire to buy the yellow metal to invest their savings, fearing any decrease in the exchange rate of the pound and a rise in inflation as a result of the global inflation wave and the Russian war in Ukraine, which led to an increase in the purchase of gold bullion and pounds As well as the works, especially that investing in gold in Egypt during the last 3 years has achieved very high profits.
The Central Bank of Egypt, in an extraordinary meeting on March 21, raised the overnight deposit and lending rate and the central bank’s main operation rate by 100 basis points to reach 9.25%, 10.25% and 9.75%, respectively, followed by a decrease in the exchange rate. The pound against the dollar reached 18.43 pounds for purchase, and 18.54 pounds for sale.
An advisor to the Minister of Supply expected the stability of gold prices during the coming period, with the regularity of selling rates after the end of the Eid Al-Fitr holiday, and the return of the opening of gold shops after the holiday, especially that the exchange rate of the pound is stable against the dollar, in addition to the announcement of the Central Bank of Egypt’s meeting of the Monetary Policy Committee on schedule. On the 19th of May this year
The Monetary Policy Committee of the Central Bank will hold its third meeting in 2022 on May 19, after it met on February 3 and March 21.
Naji Farag said that the price of 18 karat gold recorded 1037 pounds ($ 56), 21 karat recorded 1210 pounds ($ 65), 24 karat recorded 1382 pounds ($ 74), and the gold pound recorded 10,100 pounds ($ 546).
For his part, Engineer Rafiq Abbasi, former head of the Gold Works Chamber of the Federation of Egyptian Industries, said that the rise in gold prices in Egypt during the past few days came as a result of the increase in the volume of demand amid a decrease in the volume of supply in the local market, attributing the reason for the shortage to the tightening of import procedures by the Central Bank of Egypt. To maintain foreign currencies to import basic commodities, which negatively affected the volume of gold supply.
The Central Bank of Egypt had previously issued, last February, a decision to stop dealing with collection documents in the implementation of all import operations, and to work with documentary credits only, with the exception of branches of foreign companies and their subsidiaries, and to allow banks to accept collection documents received for goods shipped before the decision was issued .
Abbasi explained, in exclusive statements to CNN in Arabic, that the Egyptian market was resorting to equalizing the size of the supply of gold in the Egyptian market, whether by export or import, but with the tightening of import from abroad and the high demand locally, which led to a decrease in the volume of supply, which led to a discrepancy In the market price of gold, the variance reached 300 Egyptian pounds ($16) per gram, before gradually decreasing to 100 Egyptian pounds ($5) after a drop in demand.
According to data from the World Gold Council, the volume of demand for gold works in Egypt in 2021 amounted to about 27.9 million tons, an annual increase of 42%.
Abbasi added that the price of gold before the tightening of import procedures was based on its price on the international stock exchange and the exchange rate of the pound against the dollar, in addition to expenses not exceeding 15 pounds per gram in return for transportation expenses and the profit margin of traders.
In response to the news of the closure of the gold market in Egypt, Abbasi confirmed that they were rumors circulated on social networking sites and were unfounded, and the Federation of Industries and Chambers of Commerce quickly denied these rumors.
And the Gold and Precious Metals Manufacturing Division of the Federation of Industries, and the General Division of Jewelery Trade in the Federation of Chambers of Commerce, issued a statement in which they confirmed that the publication circulating on the communication sites regarding stopping the movement of gold trading was issued by a fake and unknown company that is not registered with the two divisions, stressing that the operations of the two divisions have not been stopped. Buying and selling from any store.