Gold prices in Egypt fall 2% affected by bank certificates high yields

The 21-karat gold price, the most common, recorded EGP 2,165 per gram on Saturday, down by 2% compared to last week’s EGP 2,210 per gram, according to the Gold Bullion.

The report of Gold Bullion noted that one of the most important events that affected gold markets locally during the past week was that the National Bank of Egypt and Banque Misr’s two new savings certificates; the return on the first certificate reached 19% with a fixed return paid monthly, the return on the second certificate is decreasing 22%, and the two certificates are for a period of 3 years.

The report highlighted that interest rates, after the CBE’s recent decision to raise the interest rate by 200 basis points on overnight deposits, reached 18.25%, and the lending interest rate increased by 19.25%, while the main interest rate reached 18.75%.  This is the highest level since July 2017.

Gold prices were negatively affected by the announcement of the new certificates because a large part of the liquidity was diverted to investing in savings certificates. However, the amount of decline in gold prices is weak compared to the amount of increase recorded by gold prices during March by 32%, at a value of approximately EGP 540.