Exclusive | Egypt’s Gold Market to Mirror Global Uptrend: Experts Forecast
Updated 5/19/2024 5:13:00 PM
Arab Finance: Gold experts are expecting gold prices in Egypt to rise over the coming period, aligning with the ongoing global uptrend.
These predictions also coincide with many analysts’ forecasts that the US Federal Reserve would cut interest rates more than once throughout 2024.
Gold prices in Egypt have hit record highs over the past days, mirroring the global uptick, with gold price surpassing $2,400 per ounce.
Nady Naguib, Secretary-General of the Gold Division at the Federation of Egyptian Chambers of Commerce (FEDCOC), told Arab Finance that local gold prices are likely to see further increase. This is attributed to the global hike in gold price per ounce, in addition to expectations that the Fed would maintain interest rates at its upcoming meeting.
Speculations over the Fed having to cut interest rates at least twice before the end of the year are also impacting gold prices, as per Naguib.
Revival of Gold Market
Naguib highlighted that gold prices in Egypt have stabilized recently due to the exams time and the impact of holidays.
However, the market is projected to revive over the coming period due to increased demand for gold and the shortage in its supply, especially after the end of the zero-custom gold import initiative.
On November 8th, 2023, the Egyptian government announced the extension of decree No. 1801 of 2023, granting a customs exemption on gold imports for six months that ended on May 10th, 2024.
Global Demand from Central Banks
For his part, Amir Rizk, a gold industry expert, pointed out that a number of central banks worldwide, particularly China’s central bank, have started purchasing large amounts of gold.
Therefore, this has elevated demand for gold, which will consequently drive gold prices higher, Rizk explained.
He also noted that gold prices are expected to hit $2,500 per ounce within 10 days, with the possibility to reach $3,000 by the end of 2024. This would clearly impact local gold prices, pushing them up in the next period.
In 2023, gold prices in Egypt reached unprecedented levels, affected by sharp fluctuations in the foreign exchange simultaneously with major gold traders intervening in price setting. As a result, a significant gap was caused between global gold prices and the local ones.
It is worth noting that gold prices in the Egyptian market recorded their highest ever last January, with the 21-karat at EGP 4,100 per gram and the 24-karat at 4,690 per gram.
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