Egyptian women typically receive valuable gold jewelry, known as "shabka," as a gift upon engagement. However, due to the increasing demand for precious metals amid rising prices and a weakened currency, some are now receiving silver instead of gold. The fluctuations in Egypt's parallel currency market and the expected decline in the value of the pound have created chaos in the gold trade, prompting some individuals to turn to silver as a means of preserving the value of their savings.
Since early 2022, the Egyptian pound has depreciated by nearly 50% against the dollar, amidst a growing shortage of foreign currency inflows. The pound has also plummeted in the black market, leading Egyptians to seek protection for their savings by purchasing dollars, precious metals, and real estate. In a country where it is estimated that around 60% of the population of 105 million lives below or near the poverty line, only a few can afford investments in high-end real estate, which has seen robust sales.
Last month, the dollar price in the black market surged to 71 pounds compared to its official rate of 30.85 pounds, before dropping to below 60 pounds in recent days amid expectations of expanded financing from the International Monetary Fund, alongside reports of Emirati investments on Egypt's Mediterranean coast.
According to the annual report from the World Gold Council, the demand for gold coins and bars in Egypt increased by 57.8% between 2022 and 2023. The price of 21-carat gold rose by 122.7% to 3,875 pounds (about $126) in the year ending January 30, according to the General Federation of Egyptian Chambers of Commerce.
Economic expert Ehab Samra indicates that this surge in demand is driven by "panic," adding that "owning gold at this moment is neither an investment nor a means of saving, it is a flight of money to a safe haven as a legitimate measure to defend wealth." Nancy Mustafa, a housewife who started converting her savings from the local currency to gold two years ago, said she prefers saving in gold for its ease of trading: "I can sell it anytime and it's possible for me to buy unlike dollars, so it's easier for me to preserve the value of my money."
Ehab Wasef, head of the Gold Division at the Federation of Egyptian Industries, stated that current gold prices are "unfair" and that purchasing the yellow metal during this tumultuous period is "illogical." He remarked, "The rush to acquire gold recently is due to trends on social media saying 'buy gold, gold is increasing,' and people are following what is said on social media."
Security sources reported that "dozens of gold traders have been arrested on charges of manipulating the market, prompting some other traders to cease selling." Gold jewelry remains a traditional gift for occasions like weddings or the birth of a child, but 51-year-old Iman Mahmoud, a mother of three, said she had to choose silver. She noted, "A small 18-carat earring weighing less than a gram costs over 3,000 pounds. Of course, I cannot afford to buy a gift for that amount, so I bought a silver chain for about 1,900 pounds." She added, "It is not like gold, but it still has value."
Wasef Amin, a consultant in the Gold and Mining Division at the Federation of Egyptian Industries, explained that there is a growing demand for silver bars and silver jewelry, even though some consider it "second-rate." Hani Wasef, a well-known silver trader in the Khan Abu Taqia area of Old Cairo, noted that his clientele typically consists of low-income individuals wanting to preserve their money's value and who cannot afford to buy gold. The price of silver per gram has more than doubled over the year to reach 47 pounds, according to traders who spoke to Reuters.
Rami Zahraan, an 18-year-old high school student, purchased silver bars at a price of 31 pounds per gram over six months ago based on his uncle's advice, who works in the silver trade. He added, "My money can't even buy 10 grams of gold."
