CAIRO: An advisory council for gold, diamonds and precious stones formed by the Ministry of Trade and Industry last week will try to harmonize the views of industry leaders with future policymaking in that field, Trade Minister Rachid Mohamed Rachid said in an email to Daily News Egypt.
Though not directly linked, news of the council s creation came as uncertainty over the United States financial sector boosted precious metals markets and fueled predictions that gold, long a bastion for investors during troubled times, will continue to rise.
We wanted to bring entrepreneurs from within the industry on to this council in order to further involve them in the formulation of policies that pertain to the gold, diamond and precious stones sector, Rachid said.
We see huge potential for growth in this sector and, as previous experiences with various other sectors illustrated, that the best way to formulate policies that drive the growth of particular sectors is by allowing industry insiders to take the lead on the policy side.
The council will include members of the trade ministry, the Federation of Chambers of Commerce, the Federation of Egyptian Industries, the Consumer Protection Agency and the Industrial Modernization Center, according to early reports. Sherif El Sirgany, president of Sherif El Sirgany Jewelry, will chair the group.
The council must meet at least once every two months, and councilpersons terms will last two years, according to the ministry. The council will not replace any existing groups, nor will it have any direct sway over the industry, said sources at the ministry.
Council meetings are expected to begin in early October.
Analysts have pointed to the recent growth of mining in Egypt as one spur for the council s formation.
The metals and mining industry has been undergoing significant developments recently, with the law governing operations being revised and a separate authority being established, the investment bank Beltone Financial wrote in a statement last week. The increase in international commodities and metals prices has rendered metals and minerals production in Egypt feasible, especially for gold, silver and other metals.
The Sukari mine, located in the eastern Sahara and estimated to hold about 13 million ounces of gold reserves, will start commercial production next year, Petroleum Minister Sameh Fahmy said last week, according to the Egyptian news portal Masrawy.
Egypt has signed eight agreements totaling $33 million with firms from Russia, Cyprus, the United Arab Emirates and Canada for further gold exploration, the minister added.
Markets for gold and other precious metals have reflected the instability of the US financial markets in recent weeks as American lawmakers struggled to advance and amend an unprecedented – and widely unpopular – $700 billion rescue plan for the nation s struggling financial companies.
Historically, economic crises like the Great Depression and the oil scare of the late 70s have boosted demand for gold, as investors flock away from stocks and other investments that depend on political and financial stability.
In March, this year, gold prices shot above $1,000 per ounce for the first time ever, riding fears of a US recession.
Prices have since sunk back below $900, but some analysts now say they could climb even higher than their previous record if instability continues. By the end of last week, gold rose 2.8 percent as bailout negotiations stalled, reaching as high as $920.10 per ounce at one point.
As of press time, an ounce of bullion was trading for over $887.
Many central banks back up their currencies with hefty reserves of US dollars. A sharp fall in the greenback could push these banks to look for new types of reserves, likely including gold, which was the standard reserve for even the US dollar before the fall of the Bretton Woods system in 1971.
Gold mining, a millennia-old practice in Egypt, has bred renewed excitement here over the past decade. During the 90s, the Australian mining company Centamin discovered gold in the Eastern Desert; the firm’s founder, Sami El-Raghy, has since been quoted as saying that revenue from gold could exceed the total from tourism, petroleum and the Suez Canal.
Growing tourism and the entrance of global brands through venues like CityStars Mall have bolstered demand for higher-end gold and jewelry here in recent years, according to some in the industry.
