Egypt’s gold exports decline by 45% in 5M 2023

A recent report issued by Gold Bullion has revealed the reasons for the decrease in Egypt’s exports of jewelry and precious stones during the first five months of 2023 by 45%, to record $425m, compared to $766m during the same period of 2022. The main reason behind this decline is due to weak global demand for gold during the first half of the year due to depreciation of gold prices and investors directed to government bond markets, which were characterised during the last period by high returns on them.

The Gold Bullion report stated that Egyptian exports of jewelry and precious stones are still focused on some traditional markets without opening new markets for exports, as Canada ranks first with about $309m, compared to about $320m during the same period of 2022. The UAE market comes in second with approximately $110m, compared to $442m in the same period last year, accordingly, the significant impact on total exports is due to the decrease in demand in the UAE market.

The report indicated that one of the reasons for the decline in Egypt’s gold exports is the resort of central banks around the world to raise interest rates to counter the wave of global inflation, and this has caused an increase in demand for government bonds in general, which negatively affects the attractiveness of gold for investment due to the high cost of gold.  The alternative opportunity, as gold is an asset that does not provide a return to its holders, compared to government bonds that provide a return that increases with the increase in interest rates.