The COVID-19 outbreak has a direct negative impact on the gold market in Egypt which has been experiencing a recession, said an Egyptian economic official.
“Since the appearance of the novel coronavirus in Egypt, the gold market has been suffering a massive recession and sales have fallen by more than 80 percent,” Nady Naguib, secretary of the Gold Division at the Cairo Chamber of Commerce, told Xinhua.
On Thursday, Egypt reported a new daily record of 1,127 coronavirus infections, raising the total cases in the most populous Arab country to 20,793, including 845 deaths and 5,359 recoveries.
Since mid-March, Egypt has suspended schools and universities and closed entertainment places and malls as part of the anti-coronavirus precautionary measures.
From the beginning of the Muslim Eid al-Fitr holiday on May 24, the government extended a previously imposed nighttime curfew from nine hours to 13 hours for six days over COVID-19 concerns.
The early closure of stores during the holiday, which is considered a season for gold sales, added to the recession suffered by the gold market, because most customers in Egypt used to go out to buy jewelry in the evening.
Despite the decline in sales, gold prices in the Egyptian market are witnessing successive hikes.
Veteran merchants in the gold market attribute the global rise of gold prices to the negative repercussions of the worldwide outbreak of the novel coronavirus, which affected the economies of most states.
“Some countries feared the devaluation of their local currencies and the collapse of their economies. As a result, they resorted to buying tons of gold as a safe and global commodity that they can sell after the crisis is over,” the secretary of the gold division explained.
Experts in the Egyptian gold market expect gold prices to continue rising in the coming period, since no one knows when the COVID-19 crisis will come to an end, which means continuous fear of the disease and continuous precautionary measures against it.
The gold prices in Egypt are linked with the global market, so the large demand of some countries for buying and saving gold bars has led to worldwide gold price hikes, said Rafik Abbasi, Egyptian chief gold manufacturer.
Abbasi, head of the Metallurgical Chamber‘s Gold Manufacturers Division at the Federation of Egyptian Industries, agreed that gold sales in Egypt “significantly decreased” over the coronavirus crisis.
“The gold price hikes are expected to continue amid the collapse of the economies of some countries because of the coronavirus crisis, and vice versa,” the veteran gold manufacturer told Xinhua.
Before they have to close early in the evening to adhere to the nighttime curfew, most jewelry shops in Egypt are vacant without customers, even during the Eid al-Fitr holiday, when they used to be busy and open until midnight every year.
“Since March, the gold market is almost frozen, because people are afraid to leave their homes because of the highly infectious virus,” said Mostafa Mikkawy, a gold shop owner in Giza province in south of Cairo.
He pointed out that since mid-March, his sales have declined by about 85 percent, adding that the outbreak of COVID-19 led to the decline of engagements and marriages, which greatly affected the gold sales.
“Among the customers who entered my shop since mid-March, only one groom came in to buy some jewelry wedding gifts for his bride,” Mikkawy said regrettably.
He described the rise of gold prices as “temporary,” expecting them to go down when the crisis is over.
“I hope that this pandemic will soon come to an end, life will return to normal and the gold market will recover, because my business has suffered a lot since the appearance of the virus,” the gold shop owner told Xinhua.