Egypt's gold market sees revival
"The market in Egypt is doing really well," Moaz Barakat, managing director of the industry-funded World Gold Council in the Middle East, Turkey and Pakistan, said.
"The economy is improving, many tourists are buying gold, and the government is reviving the market," he told Reuters.
Egypt, which once considered gold as "the skin of the gods," is likely to achieve an economic growth rate of around 7 per cent in the 2007/8 fiscal year despite rising inflation rates, Investment Minister Mahmoud Mohieldin said last Monday.
Egypt was among the fastest growing countries in tourism last year, according to the World Tourism Organization.
Major regional players are expanding their manufacturing capacity, such as United Arab Emirates' Damas Jewellery and Saudi Arabia's L'azurdi Jewellery, and sales campaigns have significantly boosted demand in the country, Barakat said.
"These manufacturers are attracting Egyptians to buying gold again, and it is now back in fashion... that was not the case a few years ago," Barakat said.
Egyptians, who once used gold as a dialy ornament and buried their pharaohs bedecked with the precious metal, consider gold jewellery a financial security and a vital part of weddings.
Despite soaring gold prices, last year's demand was up 12.2 per cent at 67.3 tonnes. The country's fourth-quarter demand was up 8.8 per cent at 17.4 tonnes.
"Compared to the rest of the Middle East, and particularly the Gulf, Egypt was the best performer in the fourth quarter of last year despite high and volatile gold prices," Barakat said.
Gold rose more than 30 per cent in 2007 amid safe-haven buying due to credit market turmoil and worries about the health of the US economy.
Spot gold set a record high of $975.90 a troy ounce in Europe on Friday as a weaker dollar and escalating worries about price pressures triggered a wave of investor buying.
Gold's rally weighed on fourth-quarter demand in Saudi Arabia, the Middle East's largest gold consumer, depressing volume by 8.9 per cent to 22.4 tonnes.
In the UAE, demand followed a similar pattern, and fell 8.1 per cent to 19.3 tonnes during the same period.
In other countries such as India - the world's top gold consumer - demand has suffered, Italian consumers temporarily suspended orders, and Japanese retail investors are offloading.
"Things are going well for us here, and we are seeing many keen buyers, who are either tourists or ordinary housewives who think it is a good time to buy gold and perhaps sell it later if prices go higher," Abdo Mallak, a Cairo jeweller said.
"I think wearing gold jewellery is becoming trendy again, and many women here want to be trendy regardless of the price."
Egypt is revisiting ancient deposits of the metal - some of which have not been worked for 2000 years. (Reuters)
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