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Editor in Chief Mohamed Wadie

Gold Market Stagnation Grips Menoufia as Used Goods Dominate


Gold Service

Wed 05 Jun 2024 | 11:47 PM
Waleed Farouk

Eid Youssef, head of the gold department at the Menoufia Chamber of Commerce, stated that the gold market is experiencing a state of stagnation due to a decline in citizens' confidence in gold as a savings and value-preserving tool. This comes after a wave of price manipulation at the beginning of the year, leading to an increased gap between the local market and the global price.

Youssef added that price manipulation earlier this year has led to the destruction of a significant portion of citizens' savings intended for investment. Some rushed to buy at high levels, only to sell when prices dropped by around 1000 Egyptian pounds per gram. This loss of confidence in gold has directed people towards less risky investment tools such as certificates and real estate.

He pointed out that citizens' behavior also plays a role in the price instability, with many rushing to buy when prices rise and refraining from purchasing when prices fall.

Youssef noted that there are approximately 250 gold shops in Menoufia, sufficient to meet the purchasing needs of citizens.

Furthermore, he highlighted the prevalence of shops selling used gold items in Menoufia's gold markets, with sales of new items being very weak even in times of increased demand.

Youssef added that the increasing number of shops specializing in selling used gold items in the governorate in recent years poses a threat to the new market, exposing citizens to many instances of manipulation and the purchase of items that do not meet specifications in terms of purity or stamping, or are filled with copper wires.

He also mentioned that the laws of the Stamp and Weights Authority criminalize the sale and trading of used gold, including selling used gold, which may change, punishable by imprisonment for no less than a year and a fine of no less than 10,000 pounds or one of these two penalties.

Youssef clarified that gold items of 21-carat are the most sold in Menoufia's markets, while 18-carat gold items have a weak share of sales, and a small percentage of citizens accept to buy them.

Furthermore, sales of gold bars and coins have declined in recent times, after the markets witnessed an unprecedented rush to buy, due to fears of currency depreciation.