In recent years, the Egyptian market has witnessed a noticeable rise in the buying and selling of used gold, whether directly between individuals or through social media platforms, as an alternative to traditional jewelry stores. This trend has been driven by soaring prices and by some consumers’ attempts to reduce making charges or maximize short-term gains. However, despite its apparent appeal, this phenomenon carries serious risks that could threaten citizens’ savings.
The Illusion of Saving on “Used Gold”
In this context, gold trader Ayman Tawfik said that the growing demand for used gold is no longer confined to the traditional framework between customers and gold merchants. Instead, it has expanded significantly in recent periods into direct peer-to-peer trading online and through social media platforms—opening, in his words, the door to extremely dangerous practices that are difficult for the average citizen to detect or assess their consequences.
Speaking to Ayar 24, Tawfik explained that the main driver behind this expansion is the desire of many sellers and buyers to avoid the deductions imposed by jewelry stores when selling gold items, which usually range between 1% and 2% of the gold’s value and may be higher in some cases. When used gold is sold to a professional dealer, deductions typically include stones, clasps, signs of wear, and sometimes even part of the gold’s value itself—pushing some sellers to seek a direct buyer “without deductions.”
Tawfik noted that this behavior is fundamentally based on what he described as “mutual greed”: the seller wants to sell at a higher price without deductions, while the buyer hopes to purchase below market price. Although this equation may appear to be a win-win deal in theory, the reality, he warned, involves potentially catastrophic risks.
He added that these “apparent gains” are entirely conditional on proper procedures and good faith—conditions that are rarely met outside the regulated, formal market—leaving consumers exposed to substantial financial losses that can far exceed any savings achieved at the time of purchase.
Legal Risks
Tawfik stressed that the most dangerous aspect of buying used gold from individuals is the absence of proof of ownership. How can a buyer be sure that the item is not stolen or disputed? He warned that a buyer could unknowingly end up in possession of stolen gold or items with hidden alterations, exposing them to serious legal liability that far outweighs any savings on making charges.
He acknowledged that selling used gold legally is possible, but only if the gold is properly hallmarked and its purity clearly verified in line with official standards.
Tawfik emphasized that dealing with unknown individuals offers no point of reference if problems arise later—no invoices, no fixed address, no commercial registration—making any loss final if an issue is discovered.
Deceptive Weight: Gold Can Lose Half a Gram
Tawfik warned of a common fraud scenario in which seller and buyer agree to meet and visit a nearby shop merely to weigh the item and confirm its karat. In such cases, the jeweler—who is not buying the item—may only determine the apparent weight and karat without conducting a thorough inspection or heating the piece. The sale then takes place outside the shop based on incomplete information.
He explained that one of the most dangerous technical issues overlooked in the used gold market is the difference between apparent weight and actual weight. Some items—especially braided or hollow chains—contain internal cavities that accumulate soap residue, perfumes, dust, and everyday-use debris over time. These residues add “phantom weight” on the scale that does not reflect the gold’s true content.
Such residues, he said, can add up to half a gram in some cases—an issue that only becomes apparent when the piece is heated in specialized workshops. This process rarely occurs in peer-to-peer transactions, meaning the buyer effectively pays the price of pure gold for non-gold residues.
Tawfik confirmed that after heating, a piece may lose a quarter to half a gram instantly, noting that these cases are real and have happened to him personally during his work in the market—underscoring the level of risk faced by non-professional buyers.
He also pointed out that scales used in official shops are subject to precise calibration and annual inspections by the Hallmarking and Weights Authority, making manipulation nearly impossible.
He further addressed tricks involving clasps and stones, noting that some components (such as spherical beads or “elevator” clasps) are filled with silicone, adding between 35 milligrams and half a gram. Modern clasps may also contain metal springs weighing between half a gram and a full gram, which are counted as pure gold in individual transactions but deducted by reputable companies upon buyback.
Scale Regulation and Trust
Jewelry scales are subject to annual hallmarking and regular inspections, with precision down to milligrams—ensuring accurate weight measurements.
Tawfik stressed the importance of relying on official, certified scales to ensure accurate pricing and protect consumers from unforeseen losses in used gold transactions.
Defending gold merchants, he said: “It’s impossible for someone to tell you this is 10.5 grams when it’s actually 11 grams.” He added that even the smallest trader deals with millions of pounds and has no need to steal 200 pounds. However, he criticized accusations of “theft,” explaining that minor price differences often stem from commercial hedging or inventory surpluses and shortages.
Risks of Buying Online
Tawfik explained that consumers who buy gold online often lack the expertise to properly assess items. Buyers may later discover that the karat is incorrect, stones were concealed and later deducted, or that the piece was altered with other materials—costing them sums far exceeding any price difference they initially saved.
Store Policies
For jewelry stores, Tawfik clarified that selling used gold is only possible if items are officially hallmarked and properly assayed. If an item has been altered or is deficient, the store must document it and deduct any defects or missing stones from the price. He stressed that transparency in all transactions is essential to avoid disputes with customers.
Consumer Warning
Tawfik warned that dealing in used gold outside official channels is fraught with danger. Buyers may not know the true origin of the gold and could fall victim to fraud or counterfeit items. He also cautioned against purchasing small items to save minor amounts, as this can lead to much larger losses.
Hallmarks and Logos: Not All Pieces Are Equal
Tawfik revealed the existence of counterfeit gold bangles bearing forged government hallmarks and logos of major companies. These bangles are sold as 21-karat gold (875 purity) but, upon analysis, turn out to be only 9-karat (400 purity)—a disaster for buyers.
He noted that hallmarking tools can be stolen or forged, and that professional traders can distinguish genuine hallmarks through engraving quality and stamping technique—not just the number itself. He emphasized that forging hallmarking tools is technically possible.
Tawfik stressed that hallmarks alone are not sufficient to guarantee authenticity, pointing to the spread of counterfeit jewelry in the market bearing fake stamps—and sometimes even fake invoices.
Gold Bars: The Biggest Temptation, the Biggest Risk
Tawfik strongly warned against peer-to-peer trading of gold bars, explaining that some bars sold online may be hollow or filled with non-precious materials. He criticized buyers who refuse to open sealed packaging to preserve “cash-back” guarantees, calling it an irrational gamble.
“You’re risking 700,000 pounds because you’re afraid of losing a cash-back of 3,000 or 4,000 pounds,” he said, describing this mindset as the core of the current crisis.
He added that fake gold bars are sold as gifts in some foreign markets and then passed into the local market as genuine—something ordinary citizens cannot easily detect.
Real Losses and Painful Experiences
Tawfik recounted real cases of customers who suffered heavy losses from online purchases, including fake bank transfers, unsealed earrings, or items later found to be hollow or counterfeit—resulting in losses reaching tens of thousands of pounds.
He emphasized that saving a few hundred pounds can lead to losses of tens or even hundreds of thousands, making this type of purchase economically unjustifiable.
Why Bars Succeeded and Jewelry Failed
Tawfik said that the strong success of gold bars as a savings tool is not only due to their lower cost compared to jewelry, but primarily to producers’ commitment to clear, transparent policies regarding purity and buyback.
This commitment has built a high level of trust in gold bars, unlike the jewelry sector, which suffers from inconsistent karat standards and a lack of commitment by some manufacturers to buy back their products under defined conditions.
He confirmed that the absence of a clear and fair buyback policy for jewelry has severely harmed the industry and directly contributed to declining jewelry sales in favor of gold bars.
Tawfik added that the shift toward gold bars is not just about saving, but about the success of companies in establishing cash-back or buyback systems that give customers psychological and financial security upon resale.
He noted that this reality has placed Egyptian consumers—especially women—in a difficult position, forcing many to buy and store gold bars instead of jewelry for adornment, not by choice, but out of fear of losing making charges and stones upon resale.
He advised consumers to verify companies that clearly display logos and commit to policies guaranteeing full buyback of jewelry with stones intact, while warning against brand manipulation or unsubstantiated claims.
In the same context, Tawfik defended the continued production of small-weight gold bars (such as quarter-gram and half-gram bars), stating that they serve a broad segment—around 75% of Egyptians—who hedge their limited savings. Halting their production, he said, would directly harm this segment and deprive it of a safe savings tool.
The “Diamond Collapse” Lesson
Tawfik cited the collapse of Egypt’s diamond market as a harsh lesson. Diamond sales peaked in the 1990s and early 2000s but collapsed due to flawed pricing policies and lack of buyback commitments, causing customers to lose up to 40% upon resale and eroding trust.
He noted that diamonds failed because of 30–40% losses on resale—such as a ring bought for 35,000 pounds being sold for just 7,000—compared with gold, which delivered gains.
He also pointed to the disappearance of traditional local gold sales due to inconsistent purity and resale deductions, while packaged gold coins succeeded despite higher making charges, thanks to credibility.
“If gold bars are treated like jewelry, they will collapse,” Tawfik said. “Success lies in commitment to resale and quality.”
Silver: The “Dark Horse” of Investment
Tawfik confirmed that silver has emerged as a leading investment opportunity, describing it as “sweeping the market” compared with gold in recent periods. He cited a direct numerical comparison: anyone who bought half a kilo of silver just one month ago has earned around 12,000 pounds more today than someone who invested the same amount in a gold coin at the same time.
He attributed this strong performance to a growing global silver deficit—particularly in China—along with the wide price gap between gold and silver.
Future estimates, he noted, place gold at around $4,500 per ounce versus about $72 per ounce for silver, giving silver significant upside potential.
Silver prices have surged about 148%, from $29 to $72 per ounce, outperforming gold, driven by global supply shortages and rising demand in futures markets.
In this context, Tawfik stressed the importance of including silver in investment portfolios: “You must have an investment in silver.” He explained that half a kilo of silver bought for around 48,000 pounds a month ago is now trading near 60,000 pounds—yielding a 12,000-pound profit—compared with gains of only 5,000 to 8,000 pounds for a gold coin bought with the same amount.
He concluded that practical comparisons confirm that recent silver investors have achieved gains exceeding those of gold coin investors by about 12,000 pounds—reflecting a relative shift in investment opportunities between the two metals.
Used gold can offer profit opportunities if handled carefully and through trusted channels, but ignoring legal and technical safeguards exposes buyers to significant financial and legal risks.
Experts consistently advise relying on reputable stores and properly hallmarked items, and avoiding unsecured online transactions or dealings with unknown individuals.
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