The Russia-Ukraine war has spooked investors worldwide, causing them to look for a safe haven in gold and pushing the precious metal’s prices to unprecedented levels exceeding $2,000 per ounce and reaching $2,020.9 on Tuesday.

Gold reached an all-time high of $2,074.8 per ounce in August 2020, following the advent of the coronavirus pandemic and its disrupting effects on world economies.

However, some experts predict that prices will exceed this level as a result of the escalation in the Russia-Ukraine crisis and its effects on the global economy.

Prices of gold in Egypt have reached record levels since the beginning of the conflict in response to rising international prices. The price of 24-karat gold, the highest grade, reached LE1,013 per gram on Tuesday, and 21-karat gold reached LE886 per gram. The price of 18-karat gold was LE760. Before the crisis, 24-karat gold ranged in price between LE900 and LE920 per gram.

Ahmed Ehsan, the owner of a gold store in Cairo, said he expected gold prices to continue to rise next week and to reach an all-time high. “The global crises are not only limited to the Russia-Ukraine conflict, but they have also extended to concerns about rising inflation and a potential China-Taiwan conflict. All these concerns affect gold prices significantly,” he said.

He added that the price of gold in Egypt is linked to global prices, stressing that traders in Egypt do not control the price of gold. He advised people to buy gold and reduce their less important expenses in order to hedge against inflation and the repercussions of the Russia-Ukraine war.

“Gold is a safe haven at times of war and inflation. Even if it is expensive, it is a long-term investment,” he said.

Nagi Farag, an advisor to the Ministry of Supply and Internal Trade for the gold industry, said that gold prices would continue to rise as a result of the Russia-Ukraine crisis.

During a telephone interview with the ONTV channel, Farag said that prices might fluctuate as a result of the behaviour of some investors, as they decline when larger holders sell, but the general trend is that gold prices will continue to go up over the next days and weeks at least.

“We are expecting turbulence in gold prices as long as the crisis continues, and these instabilities also make the yellow metal subject to pressure by central banks, investment banks, and other institutions as a store of value,” Farag said.

He pointed out that people in Egypt buy gold in all forms, including as raw metal and made into coins, with the latter being cheaper than jewellery as they are unworked.

“The Egyptian market is very distinguished in terms of production with high-quality goods, and the gold industry has good foundations for growth,” he said. He advised people who have financial liquidity to spare to continue buying gold at the current prices, since as a long-term investment it will not lose value over extended periods of time.

Egypt’s gold reserves stand at about 80 tons, according to the World Gold Council, and the government plans to establish a city for trading in gold.

The Ministry of Supply announced that the City of Gold, to be established in the New Administrative Capital, is scheduled to include a permanent exhibition throughout the year in addition to special spaces for gold dealers.

A study for the establishment of the city, due to be implemented over the next two years, is currently being completed.

*A version of this article appears in print in the 10 March, 2022 edition of Al-Ahram Weekly.