Ahram Online spoke to Fady Kamel, the CEO of the investment group at Dahab Masr, to collect his insights on the local gold market and its outlook amid the ongoing global economic challenges.

Kamel also discussed Dahab Masr’s recent launch of an online gold investment service that allows customers to purchase gold, even in small amounts.

Ahram Online: Why did Dahab Masr launch an online gold investment service?

Fady Kamel: Dahab Masr’s objective is to revolutionise the traditional cash-to-cash gold market and transition it to a Fintech-enabled platform that provides investors with a secure, transparent, and hassle-free investment experience, while ensuring fair prices. However, the ultimate goal is to make gold investment products accessible to a wider range of investors.

Creating online stores may be a straightforward process, yet developing comprehensive information collection to assist investors in making informed decisions and offering Sharia-compliant products that meet global risk management standards is a more complex undertaking. Nevertheless, it is a crucial step in the market transformation we envision, and we are committed to meeting this challenge.

AO: Why did you launch the service at this point in time?

FK: Given the prevailing micro and macroeconomic conditions, hedge assets are the most dependable investment option for all investors. As gold is widely recognized as the cornerstone of any effective hedging strategy, facilitating transactions in this precious metal can expedite the economy's transition to the next stage of growth and help mitigate the macroeconomic challenges stemming from the Russian-Ukrainian war.

Furthermore, the catchphrase "the future is digital" has been a prominent theme across various Egyptian industries in recent years. At Dahab Masr, we view this as an excellent opportunity to assist the traditional gold market in adapting to the changing landscape and modernising its operations to better serve the needs of today's investors

AO: How do you perceive the performance of the local gold market?

FK: Recently, the local market has responded admirably to the challenging circumstances. Despite import restrictions leading to supply shortages, all market stakeholders, including industry leaders and distributors, have managed to withstand the surging demand waves.

The price fluctuations in the domestic market have presented several investment opportunities for those looking to enter or exit the market. This has had a positive impact on the perception of physical gold as an investment option among Egyptian investors, enhancing its position in their minds. Overall, these developments reflect the resilience and adaptability of the local market in the face of adversity

AO: What’s your forecast on local gold market prices over the medium term?

FK: 2023 presents an abundance of investment opportunities for those looking to enter the market, given the ongoing economic recovery. As recovering from economic challenges can often come at a significant cost, hedging can be an effective strategy to mitigate risks and safeguard investments. Hence, we strongly advise investors to consider entering the market sooner rather than later.

In addition, we also recommend diversifying one's investment portfolio to minimise risks and maximise returns. Investing in a variety of assets across multiple sectors and industries can help balance out any fluctuations in the market and enhance the potential for long-term profitability.

AO: What is the demand like for gold in the local market, and what is its outlook for the future?

FK: Based on the latest monthly gold report provided by Dahab Masr Company, March is expected to be a crucial month in terms of demand dynamics for 2023. This is because we are anticipating the central bank's decision regarding the renewal of the exceptional 18 percent certificates of deposits, or their potential exit from the banking sector. This decision will serve as the primary catalyst for demand this year.

Furthermore, global geopolitical events will also significantly impact gold prices and global interest rates. As such, closely monitoring these events can help investors make informed decisions and adjust their investment strategies accordingly.

AO: What are the challenges facing the local gold market?

FK: The local market has long been known for its closed structure and adherence to traditional practices that have guided its operations for over a century. While these practices have contributed to the market's success in terms of growth and competition, they have not always prioritised accessibility.

It is worth noting that our collaboration with Dahab Masr has brought to light the need for increased accessibility in all facets of the market to ensure continued growth. This presents a formidable challenge as we lead a revolutionary effort to adapt century-old legacies to modern standards.