Amid profound shifts reshaping Egypt’s gold market, a proposal has resurfaced calling for a halt to the production of small gold bars weighing less than one ounce. The proposal views these products as a key factor behind the decline of the gold jewelry industry in recent years, coinciding with the unprecedented expansion of the bullion market.
The proposal, put forward by gold market expert Jack Raafat, is based on a realistic assessment of local demand dynamics. According to Raafat, gold bars—particularly smaller weights—have absorbed the bulk of available liquidity, at the expense of gold jewelry, which represents the backbone of the artisanal and manufacturing side of the industry and provides direct and indirect employment for thousands across the sector.
Bullion Dominates the Market
In recent years, small gold bars have become the preferred choice for a wide segment of consumers, especially as purchasing power has weakened and gold prices have surged. Flexible weights made bullion more accessible to limited savings.
However, Raafat argues that this shift has come at the expense of gold jewelry, which has gradually lost its role as the primary driver of sales, despite historically being the most effective tool for stimulating demand—particularly in small and medium weights.
The proposal warns that continued expansion in the production of small gold bars threatens to erode a high value-added industry, transforming the gold market into a stagnant savings-only market lacking diversity, innovation, and industrial depth.
Crisis Background: Gold and the Dollar
This debate unfolds against a challenging economic backdrop that began in March 2022, marked by sharp increases in local gold prices. These were driven by a shortage of US dollars, a weaker exchange rate, and rising global gold prices.
Together, these factors pushed a large segment of consumers to treat gold purely as a savings safe haven rather than a consumer or decorative product, reinforcing demand for bullion at the expense of jewelry.
Between Regulation and Industry Protection
Raafat stresses that the proposal does not seek to eliminate bullion from the market, but rather to restore balance by limiting the production of sub-ounce bars and redirecting part of demand back toward gold jewelry. This, he argues, would help ensure industry sustainability and preserve the identity of the Egyptian gold market as one of the oldest and most established in the region.
The proposal remains under discussion among jewelers and traders. Some see it as a necessary step to protect the national industry, while others warn against restricting consumer choice amid difficult economic conditions.
What is clear, however, is that Egypt’s gold market now stands at a crossroads—one that requires balanced decisions capable of accommodating savings needs, protecting industry, and taking consumers’ purchasing power into account.
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