Gold prices have risen to a close all time high amidst political change in Egypt and unrest throughout the Middle East and North Africa region.
The price of the precious metal has risen almost 10 percent in the last month and reached $1,437.70 per ounce on Wednesday.
The previous all time high was reached on December 7, 2010 at $1432.50 per ounce.
“There has recently been a gap between New York and Egypt prices in gold and in the past week it has widened to a difference of about LE 10,” said Ahmed El Sirgany, a Cairo-based jeweler.
Markets, including commodities, have been affected in the past weeks due to political instability, currency volatility and inflation.
The increase in gold also sees investors trading as a way to protect their wealth against the political and economic situation ensuing.
Another added factor in Egypt is the recent decision handed down by newly-appointed Trade Minister Samir El-Sayyad, banning the export of gold in all its forms until June 30.
It was said to be a preventive measure to avert attempts by former government officials and businessmen who are either under a watchful eye or already under investigation for illegal activities by the prosecutor general.
The ban has been written to include everything, even jewelry and ornaments.
“This decision, which comes in light of the exceptional circumstances the country is passing though…, is to preserve the country’s wealth until the situation stabilizes,” said the official news agency MENA.
“We have defied the prices of gold in Egypt and are no longer looking at New York prices to set ours,” El Sirgany told Daily News Egypt, adding that prices are now being set locally due to the current situation.
He explained that he has to send someone every morning now to talk to those who are selling basic gold, such as gold coins, to find out their prices and set his prices comparable to those.
In the first few days following the Jan. 25 protests in Egypt, the price of gold reached LE 220 per gram then rose to LE 228 within a week after and the next four to five days saw a rise to LE 230 per gram.
“The traders have agreed to set their prices in the country at 225 for the time being,” said Tarek Youssry, manager of El Sirgany’s store who is in charge of their gold section.
“Before, we used to buy at LE 235 and sell at LE 240, but the export ban has changed that,” he added.
El Sirgany’s store is currently selling at LE 225 per gram for 21 karat gold and buying at LE 227 per gram.
But many stores are not buying at the moment due to the prices and situation that is occurring.
“Those in Egypt now have to depend on the local market due to the export ban and the local demand is low so prices are going down and profits are decreasing,” said Youssry.
He added that most profits in the market are made from exports.
El Sirgany points out that before the revolution, the market was starting to pick up once again but now it’s down and that the price of gold jewelry gets worse every year because the price of gold is too high to sell.
“I expect the prices in our market to rise and catch up with the current prices in New York,” said El Sirgany.
According to Reuters, it is not yet clear if the export ban applies to individuals or to mining companies as well.
An official from the Sukari gold mine of Centamin Egypt said that he had full confidence the mine’s operation would not be affected by the order.
“For Centamin, this is not a problem. I know 100 percent that this is not a problem for us,” Youssef El-Raghy, managing director for the Sukari gold mine, told Reuters.
He added that he saw the decree aimed at individuals and not towards producers of gold in Egypt.