Egyptian women look at gold jewellery on display in a local store. File photo/AFP
In a joint statement circulated on local media early on Saturday, the General Division for Gold and Jewellery at FEDCOC and the jewellery and precious metals section of FEI said the process of buying and selling gold has not stopped at any of the jewellery stores nationwide.
The statement added that reports regarding the lack of transparency in gold pricing are “unfounded” and have been issued by a fictitious and unknown company that is not registered by the FEI or FEDCOC’s relevant divisions.
The pricing of gold in Egypt is subject to supply and demand mechanisms and is set based on the global prices of gold per ounce at stock exchanges.
The federations warned that “such rumours aim to harm the Egyptian economy” and vowed legal measures against those spreading false information in this regard.
A statement attributed to a company named ‘El-Eman’ that was released on Friday caused widespread controversy in Egypt, as it called on jewellers to stop buying and purchasing gold “until gold prices can be controlled based on the directives of the Central Bank of Egypt (CBE).”
According to the controversial statement, the official price of the 21-karat gold is around EGP 977 per gram based on the price determined by the global stock exchanges and the price of the USD at the CBE.
The statement asserted that the actual price of gold in the Egyptian market, however, has exceeded EGP 1,220 per gram.
Egypt’s iSagha gold price app also announced on Friday that it will not be displaying gold prices “as a result of the apparent disruption in gold prices locally.”
The app asserted that the last recorded price of the 21-karat gold was EGP 1,250.
Gold prices in Egypt have been on the rise over the past few days, increasing from EGP 1,090 for 21-karat gold last Saturday to EGP 1,215 on Friday and EGP 1,250 this Saturday.
The increase in gold prices in Egypt comes in light of an increasing demand for gold amid global developments, according to experts.
The US Federal Reserve (FED) decided on Wednesday to increase its interest rate by a rare half-percentage-point — the largest increase in two decades — in an effort to reduce burgeoning inflation that is running at a four-decade high.
On Friday, gold prices were higher, as spot gold rose by 0.2 percent to $1,880.86 per ounce, while US gold futures rose by 0.3% to $1,882, according to CNBC figures.
The CBE is scheduled to meet on Thursday 19 May to discuss the future of the interest rate in the country in light of the FED’s latest decision, with experts expecting the CBE to raise the interest rate.
Ahmed Moaty — a financial market expert — told Ahram Online that the CBE is expected to raise the interest rate by 0.5 to 1 percentage point or keep it unchanged during its next meeting. He noted that the CBE depends in its decision on economic figures and indicators rather than the FED’s decisions.
The CBE’s probable decision to increase the interest rate will seek to fight inflation in Egypt and curb the possible withdrawal of foreign funds from the country.