Gold in Egypt going mad

Professor of Economy in the Faculty of Law, Benha University Magda Shalabi believes that the crisis, which has seen the global price of gold hit $1,718 an ounce, has been exaggerated.

“One wonders whether it’s best to invest in gold or put one’s money in the bank,” she says, adding that the price is rising because people are investing in this precious metal.

The US crisis might cause a reduction in the value of Egypt’s monetary reserves, if the US dollar decreases in value, as expected.

The crisis might also lead to a decline in US investments in Egypt and other countries. This is worrying, because the US is one of Egypt’s largest commercial partners.

Adnan el-Khaki, a big jeweller, told Al-Ahram newspaper that many Egyptians are now investing in gold, something only the fellaheen used to do in the past. Indeed,

Arab people in general have started purchasing gold. Egyptians are fond of purchasing gold ingots and sovereigns.

Meanwhile, in the past eight months, the price of diamonds has risen by between 15 and 25 per cent. Again, people see them as an investment. Silver too has gone up in price.

In 1999, said el-Khaki, a gramme of 21 carat gold cost LE27.50; now it costs LE282.50 per gramme. This means the price has increased tenfold in 12 years, because some countries have weak economies and some governments use gold to compensate for their banking losses.