Wars, global political and economic instability, and the tariffs recently imposed by US President Donald Trump have taken their toll on the gold market, leading prices to skyrocket, said Hani Milad, head of the Gold Division at the Federation of Egyptian Chambers of Commerce.
The price of 24-karat gold has surged to around LE4,900 per gram, up from around LE4,270 in January, 21-karat gold to LE4,290 from LE3,735, while 18-karat gold now stands at LE3,677, rising from LE3,201. A 21-karat gold pound is priced at LE34,320 in jewellery stores, up from LE29,880.
The value of a gold pound — eight grams — is determined by its raw gold content, excluding manufacturing fees, taxes, and stamp duty.
Milad noted that local gold prices are intrinsically tied to global market conditions, such as geopolitical conflicts, and any fluctuation in international gold prices directly impacts the domestic market.
The price of an ounce of gold (31.1 grams) has reached $3,023 — unprecedentedly high, said Nadi Naguib, former secretary of the Gold Division, noting that the price of an ounce of gold had never exceeded $2,900 before.
However, as global uncertainty persists, gold continues to serve as a safe-haven asset, reinforcing its critical role in financial markets and further driving up demand.
Besides being affected by international prices, gold prices in Egypt have surged during currency devaluations, explained Adel Abdel-Salam, a gold trader and jewellery store owner, recalling that after the first floatation of the pound in November 2016, it climbed from LE245 to LE630 per gram for 21-karat gold and then continued to climb over the past five years.
However, following the devaluation in 2024 and with the value of the pound depreciating to LE50 per dollar, prices saw new levels reaching above LE2,000.
This has taken its toll on buyers. Abdel-Salam pointed out that the soaring prices have led to a drastic decline in buying and selling, with most buyers opting for very small quantities of gold.
Milad disagreed with Abdel-Salam, however, contending that “people continue to buy gold regardless of price fluctuations, fully aware that it remains a safe haven for their savings.”
Cairo purchaser Sherine Mohamed agrees. She uses any savings she may have to buy gold jewellery. However, she now buys smaller items that suit her budget.
Couples about to get married do the same. Mohsen Ahmed, a 32-year-old groom-to-be, stood outside a jewellery store with his bride-to-be recently to discuss the weight of her engagement gifts, agreeing to buy two rings and a bracelet to a total of seven grams of gold for a price hovering over LE30,000.
“It was once customary to match the weight of gold purchased by relatives for previous weddings, but today that has become an unattainable luxury. It would be unfair to compare an engagement ring bought now with one purchased just two or three years ago,” Ahmed lamented.
Abdel-Salam explained that an engagement gift had ranged from 40 to 60 grams — or no less than 20 grams — not so long ago. Currently, a bride’s wedding gift ranges from eight to 25 grams.
“In our workshop we craft lightweight gold jewellery to make it convenient for buyers,” said Naguib, “This enables them to purchase a variety of items, such as a necklace, a bracelet, and a ring, instead of purchasing just a single larger ring.”
With the rise in the price of a gram of gold, its manufacturing cost has also increased, reaching an average of LE250, up from LE80. “The decline in demand as prices rise has led gold workshops to raise their manufacturing costs due to the drop in sales in an attempt to compensate for the slow sales,” Abdel-Salam said.
Italian gold now represents only 20 per cent of the total market, with a manufacturing cost of LE650 per gram, due to its being imported, he continued. Egyptian gold jewellery is more and more able to compete with imports from abroad.
The high manufacturing cost of a gram of gold has led some buyers to turn to used gold, with the average manufacturing cost per gram reaching LE80. Used gold is popular, especially on social media. However, some have complained of fraud and of tampering with the gold.
“People should buy gold from a reliable source and a reputable dealer and obtain a certified invoice,” Milad advised. Naguib suggested that when purchasing used gold, customers should make sure that it is properly weighed by a jeweller.
“Some gold jewellery, such as bracelets, can have a metal spring weighing between 30 milligrams and a gram. The gold dealer must inform the buyer of this,” Abdel-Salam warned.
* A version of this article appears in print in the 27 March, 2025 edition of Al-Ahram Weekly
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