Currency Procurement Concerns Drive Dealers to Hedge, Keeping Local Gold Prices Above Global Levels

Gold prices in the local market remained stable on Saturday, coinciding with the weekly closure of international bullion exchanges.

According to the Gold Observatory for Economic Studies, the price of 21-karat gold stood at EGP 6,775 per gram, while 24-karat gold reached EGP 7,743 per gram, 18-karat gold recorded EGP 5,807 per gram, and the gold pound was priced at EGP 54,200.

Local gold prices continue to trade approximately EGP 105 per gram above their international equivalent, largely due to reduced activity in the raw gold market, limited liquidity ahead of the Eid al-Adha holiday, and growing concerns among traders regarding future movements in the U.S. dollar exchange rate.

Uncertainty surrounding the availability of foreign currency required for importing raw gold has prompted many market participants to adopt a more cautious pricing strategy, limiting the local market’s response to sharp declines in global gold prices.

Some dealers prefer to maintain relatively high pricing margins in anticipation of a renewed rally in international gold prices at a time when the cost of obtaining foreign currency may rise or its availability may become more restricted.

These concerns are also reflected in the widening gap between selling and buyback prices. While retail selling prices remain relatively elevated, repurchase prices offered to consumers tend to decline at a faster pace.