As soaring prices and currency devaluation grip Egypt, a shift in consumer behavior is witnessed as silver gains preference over gold, traditionally gifted to women on their engagement.
The economic crisis in Egypt, marked by inflation exceeding 30% and a currency devaluation of 50% against the dollar, has prompted a surge in demand for silver. The traditional gold jewelry set, or “shabka,” given to Egyptian women on their engagement, is being replaced by silver due to the more favorable pricing.
In the year leading to January 30, the price of a gram of 21-carat gold rose by over 120%, reaching 3,875 Egyptian pounds ($126). The escalating prices have led to a shift in consumer behavior, with a nearly 58% surge in demand for gold coins and bars from 2022 to 2023, according to the World Gold Council’s annual report.
Eman Mahmoud, a 51-year-old, shared her experience of choosing silver over gold when buying jewelry for a friend’s baby due to the affordability factor. She mentioned the rising costs of gold items, making them financially impractical as gifts.
While some Egyptians seek safety in foreign currency or property amid the economic turmoil, the black market rate for buying dollars reached as high as 71 Egyptian pounds last month. However, with hopes of additional IMF financing and Emirati investment, the rate dipped below 60 pounds in recent days.
Amid a population where an estimated 60% is close to or below the poverty line, the affordability of high-end property or gold investments is limited. As a result, silver, despite witnessing a more than 100% increase in its price over a year, remains a relatively cheaper alternative to gold, priced at about 47 Egyptian pounds per gram.
Ramy Zahran, an 18-year-old student aspiring to enter the silver business, highlighted the economic advantage of choosing silver over gold, enabling him to acquire more substantial amounts for the same investment.
