Demand for gold coins and bars in Egypt rose by 83% in 2022, as the Egyptian pound saw significant drop versus dollar and due to a marked rise in inflation, according to the World Gold Council’s report.
Egyptians resorted to gold to avert the higher uncertainty over the local currency and to hedge against inflation, the report said. The pound has lost half of its value since March’s devaluation, while annual urban consumer inflation shot up to 21.3% in December.
A mixture of high inflation, currency weakness (actual or anticipated) and political unrest combined to increase the attraction of hanging onto gold, the report said.
131% increase in Q4 after pound’s second devaluation
The demand for gold peaked in the fourth quarter, following the CBE’s second devaluation of the Egyptian pound, where demand edged up by 131%, compared to the same period a year ago.
Gold demand in the Middle East registered a 42% year-over-year soar in 2022, which was largely driven by double-digit advances in Egypt over the final three months of the year.
The following line chart shows the evolution of gold demand on bars and coins from 2020 to 2022, which signals the upside trend in gold demand since the beginning of the COVID-19 pandemic in 2020.