Gold prices in Egypt fluctuated significantly during the Eid Al-Adha holiday, due to weak demand and increased speculation. Prices rose from EGP 2,260 per 21k gram before the holiday to EGP 2,300 per gram, before falling back to EGP 2,220 per gram on Monday.
The weak demand was due to the holiday season when people are less likely to buy gold. Speculation on gold prices also contributed to the fluctuation, as investors bought and sold gold in anticipation of future price movements.
Global gold prices also played a role in the fluctuation of local prices. Gold prices on the global market fell to their lowest level in three months before recovering to above $1,900 an ounce.
The Egyptian government has taken some steps to increase the supply of gold in the local market. In May, the government exempted gold imports from customs duties. So far, about 300 kilograms of gold have been imported under this exemption.
The Gold Division at the Federation of Egyptian Chambers of Commerce has also increased the processing value of gold jewellery by 10%, starting from July. This will make gold jewellery more expensive, but it could also help to increase demand for gold.
The Central Bank of Egypt (CBE) has kept interest rates unchanged at 18.25% for the second time in a row. This stability in interest rates could help to support the Egyptian pound and make gold more affordable for investors.
Overall, the gold market in Egypt is expected to remain volatile in the near future. However, the government’s efforts to increase the supply of gold and stabilize the pound could help to reduce the volatility in the market.
