Gold prices in Egypt could decline on high-yield CDs, geopolitical de-escalation: FEDCOC

Pricing of gold in Egypt rests on a set of factors including global pricing, the USD/EGP exchange rate, and the supply/demand dynamics, El-Monieb added in a statement sent to Ahram Online on Monday.

He noted that gold prices surged 255 percent since March 2022 due to the invasion of Ukraine, which led to a series of negative economic ramifications for Egypt, including the outflowing of short-term USD deposits, “hot money.”

Earlier in January, the National Bank of Egypt and Banque Misr announced issuing new CDs with 23.5 percent and 27 percent, respectively, annual yields.

Egypt is currently experiencing a severe US dollar liquidity crunch. Approximately $20 billion in hot money fled the local market as investors sought higher interest rates elsewhere.

The economic pressures led to a leap in the gold demand, which is the typical haven during such turbulences, El-Monieb explained.

On Monday, the purchase price of 24-carat gold reached EGP 3,749 per gram, while the global price reached $65.87.