Gold Bullion, a company that specializes in gold trading, said that Egypt’s joining the BRICS group of emerging economies will not have an immediate or direct impact on the local gold prices, which have been fluctuating below EGP 2,300 per gram for 21k gold. The company explained that the effect of the BRICS membership will be seen in the medium-to-long term, as it will reduce the demand for the US dollar in international trade.
According to Gold Bullion, the BRICS countries will use their currencies or barter systems to settle their trade balances, which will decrease the reliance on the US dollar as a reserve currency. This will also lower the exchange rate of the dollar in the parallel market, which is used to price gold in Egypt.
However, Gold Bullion cautioned that Egypt should not expect any immediate solutions to its dollar crisis from the BRICS membership, or any soft loans from the other members. The benefits of joining the group will come from increased investments and trade opportunities, which will improve Egypt’s productivity and economic situation.
Gold Bullion also noted that the local gold market has become more stable and resilient to external shocks, as evidenced by the recent initiatives of issuing dollar certificates and allowing customs-free gold imports. The company said that gold has gained the trust of the citizens as a safe haven and a way to preserve their savings.
