Egyptian women usually receive a valuable gift of gold jewelry, or what is known as “shabaka,” upon their engagement, but due to the increased demand for this precious metal, as a result of high prices and the weakness of the currency, some of them may now receive silver, not gold.
Fluctuations in the parallel currency market in Egypt and the expected decline in the value of the pound have led to chaos in gold trade, prompting some people to resort to silver as a means of preserving the value of their savings.
The pound has fallen nearly 50 percent against the dollar since early 2022 as the country faces a growing shortage of foreign currency inflows.
The pound has also collapsed on the black market, so Egyptians are seeking to protect their savings by buying dollars, precious metals, and real estate.
In a country where it is estimated that about 60 percent of its 105 million population live below or near the poverty line, only a small number of people can afford to invest in high-end real estate whose sales are booming.
The price of the dollar on the black market jumped to 71 pounds last month compared to its official price of 30.85 pounds, before falling to less than 60 pounds in recent days amid expectations of an expansion of financing provided by the International Monetary Fund and reports of Emirati investments on the Mediterranean coast of Egypt.
“Silver has become the new gold” in Egypt as citizens try to protect their savings
According to the annual report of the World Gold Council, the demand for gold coins and bullion in Egypt increased by 57.8 percent between 2022 and 2023. The price of a gram of 21-carat gold also rose 122.7 percent to 3,875 pounds ($126) in the year ending January 30, according to the General Federation of Egyptian Chambers of Commerce.
Economist Ihab Samra believes that this demand is driven by “panic,” adding that “owning gold at this moment is neither an investment nor a savings, it is an escape with money to a safe haven out of the legitimate right to defend money.”
Nancy Mustafa, a housewife who began converting her savings from the local currency to gold two years ago, said that she prefers to save in gold because of its ease of trading. “I can sell it at any time and it is available. I can buy it, not like the dollar, so it is easier for me to save the value of my money.”
Ihab Wassef, head of the Gold Division at the Federation of Egyptian Industries, believes that current gold prices are “unfair” and that buying the yellow metal during this turbulent period is “illogical.”
He said that people’s recent rush to acquire gold is due to “the trends of social media pages that say ‘Buy gold, gold is increasing’ and people are following the words of social media.”
Security sources said that dozens of gold traders were arrested on charges of manipulating the market, which prompted some other traders to stop selling.
Gold jewelry is a traditional choice for gifts on occasions such as marriage or the birth of a new child, but Iman Mahmoud, a 51-year-old mother of three children, said she had to choose silver.
Iman says, “A small 18-karat earring, weighing less than a gram, costs more than 3,000 pounds. Of course, I cannot buy a gift with this amount, so I bought a silver chain for about 1,900 pounds.”
She adds, “It’s not like gold, but it has value.”
The price of a gram of silver more than doubled within a year, reaching 47 pounds
Wasfi Amin, advisor to the Gold and Mining Division at the Federation of Egyptian Industries, explained that there is an increasing demand for silver bullion and silver jewelry, despite some considering them to be “second-class.”
Hani Wassef, a well-known silver merchant in the Khan Abu Takiya area, in Old Cairo, said that his customers are usually people with limited income who want to preserve the value of their money and cannot buy gold.
Abanoub, a seller in a silver shop in Cairo, who requested that only his first name be used, said that some newlyweds buy wedding nets made of silver, instead of the usual gold, adding in the Egyptian dialect that “silver has become gold.”
The price of a gram of silver has more than doubled in a year, reaching 47 pounds, according to traders who spoke to Reuters.
Rami Zahran, an 18-year-old high school student, bought silver bullion at a price of 31 pounds per gram more than six months ago on the advice of his uncle, who works in the silver trade.
He added, “My money doesn’t bring 10 grams of gold.”
2024-02-09 04:31:55
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