Marsad al-Dhahab: 59% of Egypt's Gold Market Heading Toward Contraction... and an Unprecedented Shift Toward Investment

A recent survey issued by the "Marsad al-Dhahab," featuring the participation of 521 traders in the Egyptian market, has revealed a clear shift in demand patterns. The findings highlight a significant decline in jewelry sales against a strong surge in gold bars and coins during the first quarter of 2026.

Dr. Walid Farouk, Director of the "Marsad al-Dhahab" for Economic Studies, stated that approximately 59.2% of traders confirmed a decline in sales compared to the same period in 2025; 29.6% reported a significant decline, while another 29.6% noted a slight decrease. Meanwhile, 29.6% indicated an improvement in sales to varying degrees, and 11.1% viewed the market as stable.

He added that the overall market performance tends toward weakness, as 51.9% of traders described commercial activity as low, compared to 44.4% who described it as medium. Only 3.7% of participants perceived the market as strong.

The survey pointed to a radical shift in consumer behavior, with 92.6% of traders reporting that the dominant trend among customers is now toward purchasing gold bars and coins for saving and investment purposes, in light of rising prices and increasing volatility.

He explained that gold bars account for 88.9% of total sales, compared to only 11.1% for gold jewelry. Demand is concentrated on small weights, with the 5-gram bar leading at 50%, followed by the 10-gram bar at 26.9%.

In contrast, the survey revealed a sharp weakness in demand for gold jewelry, with 77.8% of traders describing demand as weak. This reflects a structural shift in the form of demand within the market rather than just a seasonal decline, as consumers pivot toward savings products at the expense of consumer purchases linked to social occasions.

Farouk emphasized that this shift does not signify a complete contraction in gold demand, but rather reflects a redirection of liquidity within the market from jewelry to investment tools, amid economic pressures and high prices.

Regarding customer behavior, the survey showed that 63% are moving toward saving, while 18.5% are reducing purchase quantities, and 11.1% are postponing purchase decisions, reflecting a state of caution in the market.

Concerning the influencing factors, rising gold prices ranked first at 38.5%, followed by price fluctuations at 30.8%, and then weakened purchasing power at 26.9%.

Traders' expectations for the second quarter of 2026 varied: 37% predicted a slight improvement, 29.6% expected market stability, while another 29.6% anticipated a continued decline. This reflects a state of uncertainty with a limited inclination toward improvement.

Farouk concluded that the Egyptian gold market is undergoing a clear reshaping phase, driven by economic variables and consumer behavior, with gold's role as a savings and investment tool escalating at the expense of traditional uses.