Local and global gold markets have witnessed one of the most violent waves of volatility in the history of precious metals, after prices in the Egyptian market climbed to nearly EGP 21,700 per gram before plunging sharply within hours. Price swings reached almost EGP 1,000 per gram between highs and lows, prompting many gold shops to suspend pricing altogether amid confusion and market paralysis.
These dramatic developments revived memories of historic crises, most notably the 1974 black-market crash, as queues formed outside gold shops, the gap between local and global prices widened, and uncertainty spread among consumers and traders alike.
Portfolio Rebalancing or Collective Panic?
In this context, Ahmed Fahim, economic analyst, said that what is happening far exceeds the capacity of individuals—or even traditional traders—to fully comprehend, noting that the market is experiencing a situation where “the wave is higher than the swimmer,” with gold moving faster and more violently than any conventional analytical tools can handle.
Fahim explained that the current buying frenzy is not driven by sound investment logic, but rather by fear of missing out (FOMO), which has pushed many individuals to pour all their savings into gold at once—behavior that stands in stark contrast to previous generations, who typically avoided buying at elevated price levels.
Global Silence, Central Bank Buying
Fahim highlighted a striking paradox: the complete silence of world leaders and central banks when it comes to publicly discussing gold, despite its historical role as the world’s most important metal, even as central banks continue to accumulate it quietly as part of their reserves.
He pointed out that the United States, whose public debt exceeds $38 trillion, still operates on a fiat monetary system, while the total purchasing power of all the gold in the world has not yet reached that figure—underscoring the fragility of the current financial system and reinforcing gold’s strategic, sovereign role, one that is deliberately left unspoken.
Who Profits, and Who Pays the Price?
According to Fahim, individuals are the weakest link in this equation. They collectively own the largest share of physical gold, making them the primary target of sharp price surges followed by sudden sell-offs.
He noted that gold’s rise of nearly $1,200 in January alone is equivalent to gains that previously took six months to achieve—an abnormal and unhealthy pattern that almost inevitably precedes violent corrections.
Gold: From Safe Haven to Liquidity Tool
Fahim believes that since 2024, gold has shifted from being merely a safe haven to becoming a liquidity vehicle, used to attract massive inflows of capital and then rapidly drain that liquidity through abrupt market reversals—moves largely orchestrated by major global exchanges, particularly in Asia and the United States.
A Strong Warning on Silver
Fahim issued a sharp warning against treating silver as if it were gold, stressing that silver is primarily an industrial metal with extreme volatility, often controlled by a limited number of large institutions, and unsuitable for long-term storage using the same logic as gold.
He noted that most gold traders in Egypt do not hold silver as part of their core capital, meaning that any widespread selling panic would lead to severe pricing gaps and heavy losses for retail investors. Purchasing large silver bars (5 or 10 kilograms), he warned, poses significant liquidity risks in a thin local market.
What Is the Rational Strategy?
Fahim concluded by emphasizing that the solution lies neither in panic selling nor in impulsive buying, but in gradual and disciplined capital management, through:
Spreading purchases over time
Avoiding lump-sum investments
Limiting gold exposure to no more than 30% of total wealth
Maintaining sufficient cash for everyday needs
He stressed that selling at a loss in order to buy again later is one of the worst investment strategies, urging investors to remain patient, informed, and insulated from market noise and unqualified advice.
The Bigger Picture
What is happening in the gold market today is not the end of the world—but it is a severe stress test for investor awareness, in a market dominated by forces far larger than individuals, requiring calm judgment rather than trembling hands.
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