Engineer Hany Milad, Head of the General Division of Gold and Jewelry at the Federation of Egyptian Chambers of Commerce, affirmed that gold remains the most reliable savings vehicle for Egyptians despite the sharp fluctuations witnessed in prices over recent months, stressing that the precious metal continues to preserve wealth and generate long-term gains for investors.
Milad explained that gold prices have experienced significant volatility since the beginning of the year due to a combination of economic and geopolitical factors. He noted that the precious metal reached record highs in January, supported by global market uncertainty, tariff policies, and expectations surrounding interest rates.
He pointed out that market dynamics later shifted following regional conflicts and their impact on energy markets, particularly oil prices, alongside changes in U.S. monetary policy, which led gold prices to enter a correction phase after the strong rally recorded at the start of the year.
The Head of the General Division of Gold and Jewelry emphasized that temporary price declines do not diminish gold’s role as a safe-haven asset or a store of value. He stressed that investors who purchased gold over the past several years have achieved substantial gains, citing the rise in prices from nearly EGP 600 per gram to more than EGP 7,000 in a relatively short period.
He added that gold does not move in a straight upward line indefinitely. Instead, it naturally experiences periods of correction and recovery, as is the case with all financial markets. Therefore, consumers should not purchase gold with the intention of selling it within a short period, but rather view it as a medium- to long-term savings and investment tool.
Changing Buying Motives
Milad explained that rising inflation, economic pressures, and increasing living costs have encouraged many consumers to turn to gold as a hedge against inflation and a means of preserving purchasing power.
He noted that the motives behind gold purchases have changed considerably in recent years. While jewelry traditionally dominated demand for adornment and social occasions, gold bars and coins have become increasingly popular among consumers seeking savings and investment opportunities.
According to Milad, this shift does not mean that jewelry has lost its importance. Gold retains its intrinsic value regardless of whether it takes the form of a bar, coin, bracelet, or necklace, since the primary determinant of value remains the gold content itself rather than its shape.
He added that excessive focus on avoiding manufacturing premiums has led many consumers to favor bars and coins, despite the fact that jewelry provides both investment value and practical enjoyment. Moreover, the substantial appreciation in gold prices over recent years has far exceeded the cost of fabrication charges paid at purchase.
From “Adornment and Savings” to Investment
Milad reviewed the evolution of Egypt’s gold market over past decades, explaining that jewelry once represented the primary savings tool for Egyptian households, particularly in rural areas and provincial communities.
He noted that traditional 21-karat jewelry, especially bangles, was the most popular form of gold ownership, serving as a financial reserve that families could rely upon whenever funds were needed.
While this culture has not disappeared, it has evolved with the emergence of new investment products such as gold bars and bullion coins, which have attracted a growing segment of consumers focused on wealth preservation and investment.
Warning Against Unregulated Gold Investment Schemes
Milad warned consumers against individual schemes that involve collecting customers’ money or gold in exchange for promises of exceptionally high returns.
He stressed that such cases do not represent the gold trade or its professionals but are isolated incidents that exploit individuals seeking quick profits. He urged consumers to deal only through legitimate and regulated investment channels.
According to Milad, these schemes often lure clients with unrealistic promises of returns, ultimately putting investors’ funds at risk. He emphasized that genuine gold trading is based on actual buying and selling activity, not on guaranteed returns or money-management schemes.
Gold Funds Are Not a Competitor to Traditional Gold Trading
Regarding gold investment funds, Milad stated that they should not be viewed as competitors to traditional gold trading but rather as an additional investment vehicle suitable for specific categories of investors and financial institutions.
He explained that gold funds allow investors to gain exposure to gold prices without physically owning the metal, although they operate under a different framework in terms of buying, selling, and associated fees.
Milad added that physical gold ownership offers consumers greater flexibility, allowing them to buy or sell whenever needed, whereas investment funds are subject to specific procedures and transaction schedules.
Consumer Financing Requires Careful Risk Management
Milad also addressed the growing role of consumer-finance companies in facilitating gold purchases, noting that such mechanisms are part of a broader credit system widely used in international markets.
He explained that the success of these financing models depends on achieving the right balance between risk and return while ensuring proper assessment of customers’ creditworthiness and repayment capacity.
He added that concerns expressed by some regulatory authorities regarding the rapid expansion of consumer financing are primarily linked to fears of rising default rates amid current economic conditions.
Milad concluded that effective risk management remains the key factor in ensuring the sustainability and success of consumer-financing programs within the gold market.
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