Amid the profound transformations taking place in Egypt’s gold market, the debate over small-sized gold bars and their impact on the jewelry manufacturing sector has resurfaced, alongside growing calls to restore balance between investment-saving products and gold jewelry.
Saeed Imbaby, Executive Director of the iSagha platform for gold and jewelry, said he agrees with the proposal to reduce the production of small-weight gold bars for a limited period—suggesting one year as a trial—during which market conditions could be assessed and the ability of the jewelry manufacturing sector to regain its balance evaluated, given that it represents the core of the gold industry and employs thousands of workers.
Imbaby explained that current market behavior reflects what he described as “herd mentality” or imitation, as consumers increasingly turn to purchasing gold bars—particularly small sizes—for saving or investment purposes, whereas in the past, consumers tended to favor gold jewelry.
He added that companies and manufacturers should expand the offering of lightweight jewelry with reasonable making charges, while reducing the proportion of gemstones, so that such products can serve as an acceptable investment option without causing significant losses to consumers upon resale.
Imbaby stressed that jewelry manufacturing represents the backbone of the local gold industry, and preserving it is both an economic and social necessity, given the thousands of jobs that depend on it.
Abdel Aal Selima, Deputy Head of the Gold Division in Kafr El-Sheikh, said that talk of imposing restrictions on the production of small gold bars weighing between a quarter of a gram and one gram is “illogical,” emphasizing that there is no law or government authority that can prevent this type of trading, nor are there any official proposals to that effect.
Selima added that gold prices are determined by supply and demand mechanisms, noting that the market has recently witnessed relative stability, with local and global price differentials ranging between EGP 50 and 60 per gram, before widening amid increased local demand to sometimes reach EGP 100–150.
He explained that rational consumer behavior—by calming the market and avoiding rushed purchases in large quantities at once—directly contributes to price stability.
For his part, Hany Baky, Chairman of Margir Gold, believes that the spread of small gold bars is not the main reason behind the slowdown in the jewelry market. He explained that gold bars are an investment product, while jewelry is a consumer and decorative product, and that restrictions cannot be imposed on one in favor of the other.
He said: “It is not reasonable to demand that a gold bar manufacturer or a specialized company reduce its output or stop offering a product that is in demand in the market. That contradicts the very logic of the market. The consumer ultimately chooses the product they want.”
Baky added that the shift toward investment and saving reflects current demand dynamics, noting that many customers explicitly state that their goal is saving rather than adornment, making it inaccurate to link the slowdown in jewelry sales to the spread of gold bars.
Samih Abdel Hakim, a gold trader, confirmed that calls to restrict the production of certain gold bar weights are “impractical,” despite understanding the motivations behind them amid the slowdown affecting the jewelry sector.
He explained that gold bar factories operate under official licenses, are subject to hallmarking procedures, and generate direct revenues for the state, stressing that any talk of banning this activity lacks both legal and practical grounds.
He emphasized that realistic solutions to revive the jewelry market should focus on stimulating demand, developing designs, improving marketing mechanisms, and reviewing balanced tax and legislative policies, rather than disrupting an existing investment sector.
On the other hand, Ayman Tawfik, a gold trader, said that a large proportion of buyers of small-weight gold bars—estimated at around 70–80%—are men, not women as commonly believed.
He explained that the primary purpose of purchasing these bars is saving and investment, by accumulating small amounts in the form of gold bars before later converting them into jewelry for occasions such as marriage.
He added: “Small gold bars have not withdrawn demand from the jewelry market; rather, they have created a new segment of customers with different behaviors and needs compared to traditional jewelry buyers.”
In the same context, Saad Selima, Vice Chairman of Selima Gold, noted that small gold bars serve as a gateway for new customers and do not compete with jewelry. He explained that most demand for small weights comes from men in popular and middle-income segments, with the goal of preserving value rather than adornment, while retaining the option to later convert them into jewelry.
This debate comes in light of a proposal put forward by Jack Raafat, Chairman of Jack Group, aimed at limiting the production of gold bars weighing less than one ounce in order to restore balance between investment-saving products and consumer jewelry, and to protect the artisanal industry from decline. Raafat believes that continued expansion in the production of small gold bars could turn the market into a rigid savings-only market lacking diversity and innovation, threatening the added value of the local gold industry.
Experts note that the current trend toward saving and investing in gold is driven by several economic factors, most notably rising prices, weakened purchasing power, and financial uncertainty, which have boosted demand for gold bars at the expense of jewelry. They stress that any administrative intervention to restrict legal products or force consumers to choose a specific type of gold would be impractical, and that solutions must focus on stimulating demand and fostering innovation in jewelry.
Within this context, Egypt’s gold market stands at a crossroads that requires a delicate balance between sustaining the industry, protecting consumers’ purchasing power, and encouraging saving and investment, to ensure the sector’s continuity and the diversity of its products in a way that meets the needs of all segments.
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