By Ebi Kesiena
According to the World Gold Council’s (WGC) report released recently, Egypt’s demand for gold bars and coins surged more than 300 percent year-on-year to over 10 tons in the second quarter of 2023.
As per the report, Egypt was the most significant contributor to the growth of investments in gold bars and coins in the Middle East, accounting for nearly a third of the region’s total demand of 32 tons.
Also, the report revealed that Egypt’s total gold demand for the first half of 2023 is close to the annual total for 2022, as Egyptians resort to the yellow metal as a safe hedge against inflation exacerbated by the depreciation of the local currency.
Gold prices have stabilised since the beginning of July, as 24-carat reached 2,445.75 Egyptian pound per gram on Monday, July 31, down 7.7 percent from June 1.
In May, Egyptian Prime Minister Mostafa Madbouly issued a decree exempting travellers carrying gold from customs duties and other fees except value-added taxes (VAT) for a period of six months. The decision was meant to address the shortage in gold supply in the local market, which resulted in a surge in prices.
Although, Gold prices have been stable since the beginning of July, there has been steadily continuing on a declining trajectory since May. The price of 24-carat gold reached EGP 2,445.75 per gram by 31 July, down 7.7 percent compared to its level on 1 June and 17.6 percent compared to 1 May level.
The demand for gold by central banks declined globally during the second quarter of 2023. However, the impact on the total demand was marginal.
However, in Q2 2023, gold demand (excluding over-the-counter, or OTC market) dropped slightly by two percent annually to 921 tons, driven by a marked deceleration in net central bank buying compared to above-average purchases in Q2 2022.
