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Embabi: Eliminating Black Market Has Resulted in a 30% Decrease in Gold Prices

Sun 05 May 2024 | 03:49 PM
Walid Farouk - Ahmed Emam

Saeed Embabi, the CEO of "iSagha" platform for online gold and jewelry trading, has announced that the local market's gold prices have decreased by 30% due to the government's intervention in controlling the exchange rate and stopping the black market.

"This intervention has brought the local gold price to be more consistent with the international price, and even less than the international price by about 24 pounds. Because of this, raw gold merchants are now heading for export," said Embabi.

According to Embabi, the price of an ounce on the global stock market is currently the main factor influencing prices in the local market. With the relative stability in the dollar exchange rate and the decline in demand, purchasing desires in the gold market are currently limited to customers who buy to save and preserve the value of money and others who buy to make quick profits, with buying and selling at specific times.

However, Embabi warned that speculation on gold may create a crisis in the market and push prices to unprecedented levels, especially with high demand, as happened during the past two years. 

He stressed that gold is the most important tool for saving and preserving value, and the dollar should not be turned into a commodity, but instead should be used to preserve the value of money as an alternative to gold and contribute to putting pressure on the state’s dollar revenue.

Embabi added that gold is the price of the commodity in international markets, and all times when citizens have liquidity are appropriate times to buy gold, but it is a long-term savings method. 

He also pointed out that while buying at times when prices are high, such as when 21-karat gold reached levels of 4,000 pounds, may seem like a loss, buying for saving requires a long time, and expectations of a large increase in prices are possible during the next year.

Embabi stated that the current times are suitable for purchasing, and consumers should diversify between jewelry and bullion. The pressure on bullion only harms the factories that produce jewelry, which includes a large percentage of workers, despite the fact that the manufacturing of alloys is lower than that of jewelry. The high demand for bullion only leads to an increase in their manufacturing, in addition to pressure on the stock of raw gold in the markets, which leads to an increase in prices to unjustified levels, especially with the continued decision to stop imports for gold companies.

Embabi recommended that consumers should consider gold jewelry as a compromise solution to reduce pressure on the raw gold market. The manufacturing of gold jewelry is low, similar to bullion, and at the same time, women can adorn themselves with it.