Egyptian Gold Prices Hold Steady as Global Decline Slows
The Marsad Al Dahab Index (MGI) found that gold prices in Egypt declined at a slower pace than globally, despite a stronger US dollar against the Egyptian pound.
In its weekly reading, MGI reported that the price of 21-karat gold fell by around 0.95%, compared to a 1.83% decline in international gold prices, producing an index reading of approximately 52%. This means that for every 1% fall in global gold prices, local gold prices dropped by only 0.52%.
The stronger dollar reduced the impact of the global decline on Egyptian pound pricing, but it was not enough to offset the losses. The price of 21-karat gold fell from EGP 6,325 to EGP 6,265 per gram during the week, a decrease of approximately 0.95%. In contrast, the global gold ounce fell by US$81, from US$4,430 to US$4,349.
The MGI analysis identified five key variables affecting price movements in the Egyptian market: the global gold price, the US dollar exchange rate, the local premium or discount, consumer behavior, and supply and market stability. The stronger dollar was a significant factor in limiting the transmission of the global decline to the local market.