Recent spikes in international gold prices have affected their local-market counterparts, with the domestic price per gram reaching an unprecedented LE175 in spite of diminishing demand.
Rafiq Abbas, head of the Federation of Egyptian Industries’ gold committee, attributed rising global gold prices to exceptionally high demand by national governments seeking to offset the devaluation of their respective currencies.
"It has also prompted businessmen to buy gold in hopes of compensating for losses incurred during the global financial crisis," Abbas explained.
On Thursday, international gold prices jumped by US$100 overnight, while local prices for 21-carat gold reached LE175 per gram, 18-carat reached LE145 per gram and 24-carat reached LE200 per gram. Local prices for gold guineas, meanwhile, hit LE1360.
Gold dealer Sami Fakhri expects prices — both global and domestic — to continue to rise in light of ongoing political turmoil in the region.
"Problems between Saudi Arabia and Iran over the ongoing Al-Houthi Shia rebellion in Yemen will likely affect gold prices," he said, "along with [US] President Barack Obama’s recent warnings to Tehran [over the latter’s alleged nuclear program]."
"Local demand has also been affected by the recent start of the school year, when people tend to spend their liquid cash on private lessons and school uniforms instead of on precious metals," Fakhri added.
Translated from the Arabic Edition.
