Marsad Al Dahab: Price Pressures Hit Silver Workshops as Consumers Shift Toward Bullion

A recent survey conducted by the “Marsad Al Dahab” for Economic Studies, titled “The State of the Silver Market and the Shift Toward Bullion in Egypt,” revealed that Egypt’s silver jewelry market is facing mounting pressure amid declining sales and rising production costs, while a growing segment of consumers is turning to silver bullion as an alternative savings and investment vehicle instead of traditional jewelry.

The survey findings indicate that the market is not merely experiencing a temporary slowdown, but rather undergoing a clear restructuring process, with demand patterns gradually shifting from silver jewelry toward investment bullion. This transition is being driven by rising prices, weakening purchasing power, and growing economic concerns.

A total of 109 participants from across the silver sector took part in the survey, including designers, workshop owners, and traders, providing a realistic snapshot of the local market and its current challenges.

The results showed that 75% of participants believe the silver jewelry market is currently in decline, while 16.7% described the market as active, and only 8.3% considered it relatively stable — a clear indication of slowing sector activity under the pressure of high prices and weak consumer purchasing power.

Additionally, 83.3% of respondents confirmed that jewelry sales have declined compared to last year, while only 8.3% reported an increase in sales, and another 8.3% indicated relative market stability.

The survey also found that rising silver prices have had a direct impact on jewelry sales volumes. About 58.3% of participants said sales declined significantly, while 25% reported a slight decrease. Meanwhile, 16.7% noted that sales had increased despite higher prices.

These findings reflect the scale of pressure facing end consumers, particularly amid declining purchasing power and rising living costs, which have altered purchasing priorities within the market, shifting consumer focus from adornment toward value preservation and savings.

The survey highlighted a notable change in customer behavior, with 91.7% of respondents stating that consumers now prioritize price above all else when purchasing silver, compared to only 8.3% who still prioritize design.

This suggests that the market is moving away from purchases driven by taste and fashion toward decisions based primarily on purchasing power and the economic value of the product, amid inflationary pressures affecting consumer choices.

In a related context, the survey showed that rising gold prices have contributed to increased interest in silver. Half of the participants believed gold’s price surge had only a limited effect on silver demand, while 25% said the impact was direct, and another 25% believed gold prices had no effect on the silver market.

Meanwhile, 50% of respondents confirmed there is a clear trend toward purchasing silver bullion instead of jewelry, while 41.7% described the trend as moderate.

According to the survey, the main reasons driving consumers toward bullion include viewing it as a store of value and savings instrument (66.7%), followed by higher jewelry prices compared to bullion (50%), the influence of the U.S. dollar and global prices on the market (41.7%), and finally the ease of reselling bullion and its higher liquidity (16.7%).

The findings reflect a clear transformation in the nature of demand within the Egyptian market, as consumers increasingly view silver as a lower-cost savings haven compared to gold, particularly after gold prices reached record highs.

On the production side, 83.3% of respondents said production costs have risen sharply, while 16.7% described the increase as moderate. All participants unanimously agreed that raw material prices are the single most influential factor affecting production costs.

This underscores the extent to which the local market is tied to global silver price movements and the U.S. dollar exchange rate, further increasing pressure on workshops and manufacturers.

The survey also revealed a noticeable shift in production patterns, with 91.7% of respondents indicating that workshops and factories are now leaning toward producing lighter-weight jewelry pieces, while only 8.3% reported reducing production quantities.

This trend reflects manufacturers’ attempts to adapt to weaker purchasing power by offering lower-cost products that better suit consumers in order to maintain sales activity within the market.

In one of the survey’s most notable findings, 50% of respondents said they were aware of workshops that had recently closed or suspended operations. Rising costs ranked as the primary reason for closures at 62.5%, followed by weak sales at 37.5%.

These results highlight the magnitude of the pressures facing workshops and workers in the sector, as rising raw material prices and declining demand for traditional jewelry push some producers to scale back operations or restructure production.

Regarding the market outlook, 50% of respondents expect conditions in the silver market to improve in the coming period, while 33.3% anticipate continued decline, and 16.7% foresee relative stability.

As for the future of the shift toward bullion, 41.7% expect the trend to continue strongly, while 8.3% believe it will persist on a limited scale. Meanwhile, 16.7% think interest could return to traditional jewelry, while 33.3% expressed uncertainty regarding the market’s future direction.

The survey concludes that Egypt’s silver market is undergoing a genuine restructuring phase driven by rising prices and changing consumer priorities, with silver bullion increasingly emerging as a more attractive savings and investment option compared to traditional jewelry.

The market has also become more closely tied to broader macroeconomic factors, particularly the U.S. dollar exchange rate, global metals prices, and inflation levels, making the sector’s future performance highly dependent on global market stability and improvements in domestic purchasing power.

At the same time, the survey findings reveal significant challenges facing workshops and manufacturers, especially amid rising raw material costs and declining sales. These pressures threaten to intensify further in the coming period and highlight the need for support measures aimed at helping workshop owners and creating a more stable and secure environment for designers and manufacturers.