Egypt’s gold rush shows signs of slowing

Muhammed Khalid , Sunday 14 May 2023

The Egyptian gold market is starting to stabilize following weeks of fluctuation due to a surge in demand amid uncertainty about the Egyptian pound’s exchange rate.

Gold shop in Egypt.
Gold shop in Egypt. (Ahram Gate).


By early May, Egyptian gold prices had risen by over 50 percent since the beginning of the year. But the market took a downturn recently after the government approved a decree exempting Egyptian travellers who bring gold from customs duties and approved a new gold investment fund.

The Egyptian Exchange (EGX) has started featuring per-gram prices of 24-karat gold on its website. The price updates are provided by Gold Net Trading, a subsidiary of Evolve Holding.

The EGX's Charman Rami El-Dokany stressed in a statement on the Egyptian bourse website that these prices are just indicative and have been prepared by Gold Net Trading Company under its full responsibility.

Egypt's first gold investment fund

"Subscription in the first gold investment fund in Egypt has started following relevant approvals from the Financial Regulatory Authority (FRA)," El-Dokany announced.

"The establishment of precious metals investment funds will help control the market, increase transparency and rationalize demand for gold ingots and coins," El-Dokany commented.

He noted that these funds will provide investors with an alternative to investing in gold without resorting to buying and holding gold from the market, incurring processing costs, which will mitigate risks and maximize returns in the long run.

Moreover, El-Dokany revealed that the EGX is developing a special trading programme for purchase and recovery orders on securities of the gold investment fund through brokerage companies registered on the market.

"That move will create an active secondary trading market for these securities in full coordination with the FRA," he said.

"The launching of gold investment funds is a good move. However, there is a need to educate investors and the public about the mechanism of trading in these funds and what are the opportunities they offer," Hani Milad, head of the Gold Division at the Cairo Chamber of Commerce explained to Ahram Online.

The EGX is required to establish a locally and internationally accredited processing plant to launch a precious metals investment fund.

Gold funds are investment vehicles which often take the form of mutual funds or exchange-traded funds (ETFs). ETFs can be bought directly on the stock exchange. 

Travellers exempted from gold tax

On Wednesday, the Egyptian government approved a draft decree exempting travellers who bring gold into the country from customs duties and other fees, except value-added tax (VAT), for a period of six months.

As the decision takes effect, gold prices plummeted by over EGP 200. On Sunday, the per-gram purchase prices of 24-karat, 21-karat, and 18-karat gold amounted to EGP 2,742, EGP 2,400, and EGP 2,057, respectively according to Al-Ahram.

"Such decline will not continue for long, as prices are about to reach a fair level equal to global prices," Milad concluded.

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