Some of Egypt’s major gold jewellery makers decided earlier this month to raise their prices, charging an extra LE50 per gram for 18-carat jewellery and LE30 per gram for 21-carat jewellery.
The price rises come ahead of a separate government increase scheduled to take effect on 1 July, under which average jewellery charges will rise by 10 per cent as part of the periodic tax accounting protocol signed in 2021 with the Egyptian Tax Authority.
The government decision applies to jewellery makers and workshop owners who report manufacturing charges, taxes, and stamping fees to the government and later recover these costs from retailers. The increase does not affect the price of raw gold but applies only to the value added of the jewellers.
Gold retailers will bear both increases and will eventually pass them on to consumers in the final product price.
Ashraf Adel Abdel-Salam, the owner of a jewellery shop in Cairo, said that the jewellery makers had taken the decision to overcome rising production costs amid a slowdown in demand caused by high prices and consumers shifting towards purchasing gold ingots.
He said that jewellers’ revenues come primarily from what they charge to make jewellery rather than fluctuations in the price of raw gold. A jewellery maker that previously sold 50 kg of jewellery but now sells only 20 will see a sharp decline in the income used to cover overheads including electricity, water, labour, taxes, and production losses.
With an average margin of LE10 per gram, jewellery makers rely on production volume to maintain profitability and preserve their capital stock, making their charges their main source of earnings rather than the value of raw gold.
Abdel-Salam told Al-Ahram Weekly that gold traders would like to see lower gold prices because this would stimulate purchases and increase market activity, since their earnings come mainly from manufacturing margins.
Under competition rules and free-market principles, any factory or workshop producing gold jewellery has the right to price products and set charges according to production costs. Manufacturers’ capital is measured by the grams or kilograms of gold they own, while profits come from manufacturing fees. However, critics argue that the recent increases appear to reflect a collective market move, which undermines competition.
Lotfi Moneib, deputy head of the Gold Division at the Federation of Chambers of Commerce, said distinguishing between a legitimate individual price increase and a collective agreement to raise prices is central to understanding developments in the market.
There is an important distinction to be drawn between a company independently raising prices due to its own production costs and several companies collectively imposing the same increases across the market, he said.
If a company faces higher production costs, depends on imported equipment and materials, or has dollar-denominated financing obligations, it has every right to increase its prices in line with costs and exchange-rate changes.
“But a collective agreement to impose a uniform increase is unfair because not all manufacturers face identical production conditions or costs,” he said.
Nadi Naguib, a former secretary of the Gold Division at the Federation of Chambers of Commerce, said the increase would inevitably affect final consumer prices because retailers pass higher costs on to buyers.
Jewellers’ charges traditionally vary depending on the product, with rings being priced differently from earrings or bangles. On average, manufacturing charges are around LE350 per gram.
Gold prices are currently experiencing a sharp decline, stabilising within the range of around $4,100 per ounce compared with record levels at the beginning of the year when the precious metal exceeded $5,500 per ounce in January and February.
Abdel-Salam said that when gold prices decline, demand for jewellery typically increases. He added that the average charge for locally produced 18-carat jewellery is around LE450, while for 21-carat jewellery the average is LE350.
The difference exists because higher-purity gold is easier to shape, contains less copper, and results in lower losses during manufacturing.
* A version of this article appears in print in the 25 June, 2026 edition of Al-Ahram Weekly.
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