Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

'Silver is the new gold' as Egyptians try to protect savings

Published 02/08/2024, 05:08 AM
Updated 02/08/2024, 01:32 PM
© Reuters. A boy looks at silver accessories on display at a jewellery shop in a market in Cairo, Egypt, January 21, 2018. REUTERS/Mohamed Abd El Ghany/File Photo

By Sarah El Safty and Farah Saafan

CAIRO (Reuters) - Egyptian women traditionally receive a gold jewellery set, or "shabka", on their engagement. But as surging prices and a weakening currency have driven up demand for the precious metal, some are getting silver instead.

The trend is a measure of an economic crisis in which inflation has been running at more than 30% and the central bank has allowed the currency to weaken 50% against the dollar, with more devaluation expected.

"Silver is the new gold," said a salesman at a Cairo silver store who only gave his first name, Abanob.

In the year to Jan. 30, the price of a gram of 21 carat gold rose more than 120% to 3,875 Egyptian pounds ($126), data from the Federation of Egyptian Chambers of Commerce showed.

Demand for gold coins and bars surged nearly 58% from 2022 to 2023, according to the World Gold Council's annual report.

Eman Mahmoud, a 51-year-old mother of three, said she had to opt for silver when buying jewellery for a friend's new baby.

"A small 18-carat earring weighing less than a gram is more than 3,000 pounds. I can't afford that as a gift anymore so I bought a silver necklace for around 1,900," she said.

"It's not the same, I know, but it still has value."

Those who can have sought safety in foreign currency or property.

But the black market rate to buy dollars jumped as high as 71 Egyptian pounds last month, against an official rate of 30.85, before dipping below 60 pounds in recent days amid hopes of more IMF financing and Emirati investment.

And in a country where some 60% of the 105 million population is estimated to be below or close to the poverty line, few can afford to invest in high-end property where sales have been booming.

The price of one gram of silver more than doubled in a year but at about 47 Egyptian pounds, it remains far cheaper than gold.

Ramy Zahran, an 18-year-old high school student who wants to work in the silver business like his uncle, bought silver bullion for 31 pounds per gram little over half a year ago.

© Reuters. A silver vendor waits inside his silver shop, as gold prices recorded an increase after a devaluation of the local currency, in Cairo, Egypt February 7, 2024. REUTERS/Amr Abdallah Dalsh

"My money would get me only 10 grams of gold," he said.

($1 = 30.8500 Egyptian pounds)

Latest comments

that what aml speak jewelry and saving silver returns bright to silver
Silver to be worthless soon
with BTC at $50,000 and gold at $2,000, $22 silver is the bargain of the century
Silver is the new gold- Those that did not buy physical will not be able to afford it. Those that hold physical gold will have it you borrow against and use as collateral. Buy kilos of silver and have patience
Unfortunately its shorted to oblivion by JPM abd with all the hedge they have on it itll never go up. Etherium is the new digital silver.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.