Gold Division: Gold Has Greater Upside Potential Than Downside, Current Prices Offer a Good Buying Opportunity

The General Division of Gold and Jewelry at the Federation of Egyptian Chambers of Commerce said that current market indicators suggest gold prices are more likely to rise than fall in the coming months, while emphasizing that it remains impossible to predict a specific price level by year-end due to the wide range of factors influencing the market.

During a phone interview with Egypt's Extra News TV on Saturday, Hany Milad, Chairman of the General Division of Gold and Jewelry, said forecasting an exact gold price at the end of the year is extremely difficult, as the precious metal is influenced by monetary policies, global economic conditions, international trade developments, and geopolitical tensions.

Milad noted that 21-karat gold in Egypt traded above EGP 7,000 per gram less than two months ago before retreating to around EGP 5,850, highlighting the sharp volatility witnessed by the market within a relatively short period.

"Away from specific figures, we are talking about indicators," he said. "Determining an exact gold price is nearly impossible because prices respond to changing economic, commercial and geopolitical developments around the world."

According to Milad, current indicators favor a recovery in gold prices during the remainder of the year, adding that the chances of further gains are now greater than the likelihood of additional declines.

He explained that gold could resume its upward trend if supportive global factors re-emerge, although the timing and magnitude of any rally will depend largely on developments in the global economy, monetary policy decisions, and geopolitical events.

Milad stressed that no one can accurately specify a target price for gold in Egypt because domestic prices are closely linked to international markets and are also affected by local variables, including the exchange rate of the Egyptian pound against the U.S. dollar, market supply and demand, and trading costs.

Regarding purchasing decisions, Milad said current price levels represent an attractive buying opportunity for consumers seeking either jewelry or long-term savings, noting that the market has already absorbed much of the recent price correction.

"If gold were going to fall substantially below current levels, it would likely have done so during the previous decline," he said. "Therefore, I believe current prices represent an excellent opportunity to buy."

He added that lower prices have created better opportunities for couples preparing for marriage to purchase wedding jewelry, while also offering attractive entry levels for long-term investors. However, he cautioned consumers against buying gold solely in anticipation of quick profits or short-term price targets.

Milad reiterated that gold should primarily be viewed as a long-term store of value rather than a speculative asset, noting that the market naturally experiences periods of sharp gains and losses.

Turning to manufacturing charges, Milad explained that the "making charge" represents the cost of craftsmanship added to the intrinsic value of the gold, covering the expenses associated with designing, manufacturing, and finishing each jewelry piece.

He said making charges are not standardized across the market but vary depending on the type of jewelry, production method, level of craftsmanship, technology used in manufacturing, design complexity, artistic value, labor involved, and the reputation of the brand.

Milad pointed out that even similar jewelry items, such as rings or wedding bands, may carry different making charges because of variations in design quality, production techniques, and manufacturing precision.

He added that gold bars and bullion coins generally carry significantly lower making charges than jewelry items such as bracelets, necklaces and rings, since they require less craftsmanship and production time.

According to Milad, making charges on bars and bullion coins tend to be relatively consistent among manufacturers and retailers, making price comparisons easier for consumers, whereas jewelry making charges vary considerably because of differences in design, branding and craftsmanship.

He also noted that the breadth of Egypt's gold market and the large number of manufacturers and retailers create healthy competition, ultimately benefiting consumers by encouraging more competitive pricing and better services.

Milad stressed the importance of purchasing gold from reputable jewelers to ensure that products comply with official purity standards and that customers receive clear information regarding weight, purity, pricing and making charges.

He advised consumers to compare prices among several retailers before making a purchase and to obtain a detailed invoice specifying the item's weight, purity, gold value, making charge and applicable taxes to safeguard their rights when reselling or exchanging the product.

Milad concluded that gold prices will continue to depend primarily on global developments, but current indicators suggest that upside potential outweighs downside risks, making today's price levels an attractive opportunity for long-term buyers rather than short-term speculators.