عربي English Türkçe اردو فارسى
Logo
Latest News
Business

What’s Driving Egypt’s Gold Market?

An employee at a gold shop in Khan El Khalili, Cairo (Reuters)
An employee at a gold shop in Khan El Khalili, Cairo (Reuters)
TT
TT

What’s Driving Egypt’s Gold Market?

An employee at a gold shop in Khan El Khalili, Cairo (Reuters)
An employee at a gold shop in Khan El Khalili, Cairo (Reuters)

Gold prices in Egypt have risen more sharply than global prices recently, which could affect buying and selling in a country where many use gold as a safeguard against economic instability.

Egyptian traders are worried that these recent price hikes, deemed “irrational” by some, might reduce sales. This follows a decline in the gold market during the second quarter of this year, though there has been a recent surge in purchases.

As a result, there’s renewed discussion about reinstating the customs exemption for gold brought in by Egyptians returning from abroad.

The head of the General Gold Division for Gold and Jewelry at the General Federation of Chambers of Commerce Hani Milad told Asharq Al-Awsat that the current market conditions resemble those from a year ago, prompting an urgent meeting on Friday.

They decided to propose to the government, starting Sunday, the reinstatement of the customs exemption.

Milad said this move would help balance supply and demand given the recent surge in gold demand and record high global prices.

“When we proposed the customs exemption in May 2023, the market conditions were similar to now. Reactivating this initiative seems to be the best solution,” said Milad.

“We will present it to the government on Sunday and wait for their response," he added, describing the current price spikes as “irrational.”

Moreover, Milad noted strong buying activity in the past two weeks driving up prices, leading to the proposal for reinstating the exemption. He expressed uncertainty about whether the government will approve or reject it.

Gold performed well in July, rising by 4% to $2,426 per ounce after a slight dip in June.

The increase was driven by lower US 10-year Treasury yields, making gold more attractive, and a weaker dollar, making gold cheaper for foreign buyers. Additionally, interest rates on gold futures increased more than long positions.

Most Viewed

 
 
Business

Fed Policymakers Signal Rate Cuts Ahead, But Not Because of Market Rout

The Federal Reserve Board building on Constitution Avenue is pictured in Washington, US, March 27, 2019. REUTERS/Brendan McDermid/File Phot
The Federal Reserve Board building on Constitution Avenue is pictured in Washington, US, March 27, 2019. REUTERS/Brendan McDermid/File Phot
TT
TT

Fed Policymakers Signal Rate Cuts Ahead, But Not Because of Market Rout

The Federal Reserve Board building on Constitution Avenue is pictured in Washington, US, March 27, 2019. REUTERS/Brendan McDermid/File Phot
The Federal Reserve Board building on Constitution Avenue is pictured in Washington, US, March 27, 2019. REUTERS/Brendan McDermid/File Phot

Federal Reserve policymakers are increasingly confident that inflation is cooling enough to allow interest-rate cuts ahead, and they will take their cues on the size and timing of those rate cuts not from stock-market turmoil but from the economic data.
That was the shared message of three US central bankers speaking on Thursday who otherwise had slightly different takes on exactly where the economy stands a week and a day after they decided to hold the policy rate steady but signaled a reduction as soon as next month, Reuters said.
A jump in the July US unemployment rate reported on Friday helped spark a global stock market rout that continued into Monday before equities partially recovered, as investors and analysts worried the US was headed for a recession and the Fed would need to react aggressively.
"It's hard to make the case that something has just happened that is monumental on the equity side," Richmond Federal Reserve Bank President Thomas Barkin said on Thursday, noting major US stock-market indices are still up from the start of the year.
More to the point on policy, he said at a virtual event put on by the National Association for Business Economics, is "all the elements of inflation seem to be settling down (and) I'm relatively hopeful based on the conversations I'm having that that's going to continue."
Those same conversations with business leaders also suggest the cooling in the US labor market is coming from slower hiring rather than a rise in layoffs, he said.
"I think you've got some time in a healthy economy to figure out whether this is an economy that's gently moving into a normalizing state that will allow you to, in a steady deliberate way, normalize rates or ... is this one where you really do have to lean into it."
Kansas City Fed President Jeff Schmid, one of the US central bank's more hawkish policymakers, also took note of the recently roiled financial markets.
"Financial conditions can both reveal important information on the trajectory of the economy and can also spillover to impact the real economy," he said in remarks prepared for delivery to the Kansas Bankers Association's annual meeting in Colorado Springs, Colorado. "However, the Fed has to remain focused on achieving its dual mandate" of full employment and price stability.
On that score, he said, recent "encouraging" data showing inflation around 2.5% gives him more confidence inflation is headed to the Fed's 2% goal.
"If inflation continues to come in low, my confidence will grow that we are on track to meet the price stability part of our mandate, and it will be appropriate to adjust the stance of policy," he said.
Schmid described the economy as resilient, consumer demand as strong, and the labor market as noticeably cooling but still "quite healthy," and said he views the current policy stance as "not that restrictive."
"With the tremendous shocks that the economy has endured so far this decade, I would not want to assume any particular path or endpoint for the policy rate," he said.
Chicago Fed President Austan Goolsbee on Thursday reiterated his view the central bank's policy is tight, and that to leave borrowing costs where they are even as inflation falls is to make it even tighter, risking harm to the labor market.
But like his more hawkish counterparts, Goolsbee said the stock market, and the upcoming presidential election, would not determine Fed policy.
"The Fed's out of the election business. The Fed is in the economic business," Goolsbee said in an interview on Fox News. "We're not in the business of responding to the stock market. We're in the business of maximizing employment and stabilizing prices."