Local demand for gold in Egypt decreased in the fourth quarter of 2024, despite stabilising prices, due to rising inflation and higher price levels, according to the Gold Bullion 2024 report.
Throughout 2024, gold prices in Egypt experienced significant fluctuations, driven by global financial decisions and the monetary policies of central banks. These price swings made gold a significant topic for both investors and consumers in the country.
2024 Price Fluctuations
The price of 21k gold began 2024 at EGP 3,170 per gram, and reached its peak for the year at an average price of EGP 4,200 per gram on 31 January. This marked a 32.5% increase, or EGP 1,030. The price then declined sharply to its lowest point of the year on 3 March at EGP 2,620 per gram. Since then, gold prices stabilised, settling above EGP 3,700 per gram in December. As of the publication of the Gold Bullion report, gold in Egypt is priced at EGP 3,740 per gram.
In the first nine months of 2024, Egyptian gold purchases totalled 38 tonnes, a 16.5% decrease compared to the 45 tonnes purchased during the same period in 2023.
Q4 2024 Market Overview
In the fourth quarter of 2024, 21k gold started trading at EGP 3,565 per gram and rose throughout the quarter, reaching its highest level in December at EGP 3,880 per gram. This represented an 8.8% increase, or EGP 315.
Stable interest rates from the Central Bank of Egypt and a consistent dollar-to-pound exchange rate helped to stabilise gold prices and narrow the gap between local and global prices during the quarter. However, local demand for gold decreased due to rising inflation and higher prices. At the same time, global gold prices hit historic highs, further contributing to the increase in local gold prices.
Q3 2024 Market Overview
Gold opened the third quarter of 2024 at EGP 3,160 per gram, rising by EGP 400 (12.7%) to close at EGP 3,560 per gram. Egyptians purchased a total of 10.4 tonnes of gold during this quarter, split between 5.3 tonnes of gold coins and bars and 5.1 tonnes of gold jewellery.
The stability of the Egyptian pound during Q3 helped maintain relative stability in local gold prices. However, a continued shortage of gold supplies, due to restrictions on raw gold imports and slow domestic production, led to higher prices from the supply-demand gap. The government launched initiatives to boost foreign currency inflows, which provided some relief to the gold market. Additionally, rising tensions in the Arab region increased demand for gold as a safe haven in both local and global markets.
Q2 2024 Market Overview
In the second quarter of 2024, gold opened at EGP 3,110 per gram, recording an increase of £EGP 45 (1.4%) during the quarter, closing at EGP 3,155 per gram. Egyptian gold purchases totalled 14.4 tonnes during Q2, divided between 7.6 tonnes of gold coins and bars and 6.8 tonnes of gold jewellery.
The ongoing decline in the value of the Egyptian pound drove an increased demand for gold as a safe haven during this period. The receipt of the second installment of the Ras El-Hekma deal in May 2024, amounting to $20bn, significantly improved foreign exchange reserves, contributing to stabilising gold prices. Furthermore, local gold prices were also influenced by global price increases, due to concerns over the global economic slowdown and the U.S. Federal Reserve’s tight monetary policies.
Q1 2024 Market Overview
During the first quarter of 2024, the price of 21k gold opened the year at EGP 3,170 per gram, registering a decrease of EGP 90, or 2.8%, by the end of the quarter, closing at EGP 3,080 per gram. Total gold purchases by Egyptians reached 13.2 tonnes, which included 5.2 tonnes of coins and gold bullion, and 8 tonnes of jewellery.
Key developments in Q1 included the introduction of new high-yield savings certificates in state-owned banks, a dollar liquidity crisis that led investors to turn to gold as a safe haven, and the devaluation of the Egyptian pound in March 2024 by 60%, which narrowed the gap between the official exchange rate and the parallel market rate. Additionally, the Ras El-Hekma deal helped stabilise dollar reserves and allowed the Central Bank of Egypt to raise interest rates by 6% in an effort to combat high inflation.
