Jewellery, bullion demand in Egypt shrinks by 17% in 1Q of 2024 as prices rise: WGC

Doaa A.Moneim , Wednesday 1 May 2024

Jewellery and bullion demand in Egypt declined by 17 percent in the first quarter (1Q) of 2024 to 13.2 tons, down from 15.8 tons recorded in the correspondent quarter of 2023, according to the World Gold Council (WGC).

File Photo: A salesman arranges gold jewelry in a shop at the market of Khan El Khalili in Old Cairo. Photo: Reuters

The WGC’s update on the gold demand trends, released on Tuesday, showed that gold jewellery purchases in Egypt rose by three percent (Y-o-Y) in the 1Q to three tons. This was attributed to the latest depreciation of the Egyptian pound that drove down local gold prices and the country’s expanded $8 billion loan deal with the International Monetary Fund (IMF).

On the other hand, the report showed that bullion demand in Egypt decreased by 36 percent in the 1Q of 2024 to reach 5.2 tons

Since 6 March, the Egyptian pound has been subject to the demand and supply forces in the local market. Since then, the rate of the Egyptian pound jumped by over 25 percent against the US dollar and other currencies, losing over 60 percent of its value against the greenback.

Moreover, the IMF approved a $8 billion bailout package for Egypt, expanding the loan deal from $3 billion to $8 billion through 2026, allowing the country to receive a tranche worth $1.3 billion every six months.

In its update, WGC said jewellery demand in the Middle East region declined by four percent (Y-o-Y) to 42 tons in the 1Q of 2024.

“Weaker demand in the UAE and Saudi Arabia outweighed an improvement in Egypt. The high gold price environment was reportedly the reason for the y/y declines in the UAE (-10 percent) and Saudi Arabia (-12 percent),” the report explained.

On the local level, the gold price in Egypt has reached a record level in 2024, coming close to EGP 120,000 per ounce, the highest since 2015. Gold jewellery and bullion are among the major safe havens the Egyptians lean on to hedge against economic shocks.

Globally, gold prices have witnessed their highest level since the beginning of 2024, approaching $2400 per ounce, according to the latest trading price on Wednesday 1 May. This price level is the highest in ten years.

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