Egypt's Gold Prices Decline Slower Than Global Ounce

The Marsad Al Dahab Index (MGI) found that gold prices in Egypt declined at a slower pace than the global ounce. 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 every 1% decline in the global gold ounce was matched by a 0.52% fall in local gold prices.

The stronger US dollar against the Egyptian pound softened part of the global decline, but did not fully reverse it. The official US dollar exchange rate rose from around EGP 50.94 at the beginning of the week to EGP 51.41 at the end, an increase of approximately 0.92%. Although this reduced the impact of the global gold price decline on Egyptian pound pricing, local gold still fell by around EGP 60 during the week.

The MGI reading is calculated by comparing the percentage change in local gold prices with the percentage change in the global ounce. The five variables affecting price movements in the Egyptian market are: the global gold price, the US dollar exchange rate, the local premium or discount, consumer behavior, and supply and market stability.

The index's numerical calculation compares the percentage change in local gold prices with the percentage change in the global ounce, resulting in a reading of 52%. This indicates that the Egyptian market moved in the same direction as global gold prices during the week, but declined at less than half the pace of the global ounce.