Gold and jewelry industry expert and former advisor to the Supply Minister on gold industry affairs, Nagy Farag, said that the noticeable increase in demand for gold coins and bars reflects a growing awareness of gold’s importance as an investment tool and a means of preserving savings.

During an interview with Extra News channel on Wednesday, Farag noted that this comes amid widespread expectation that prices will rebound after the factors that caused the recent declines subside.

He added that this increased demand has led to a decrease in the supply of gold coins and bars at some retailers, as many citizens are turning to gold as a safe haven during times of economic volatility and market instability.

Farag advised those wishing to invest not to invest all their allocated funds at once, explaining that gradual, phased purchases contribute to achieving better average prices and reduce the impact of sharp market fluctuations.

The significant declines in gold prices recently were driven by developments in US monetary policy, he said, particularly statements from Federal Reserve officials regarding combating inflation and the possibility of further monetary tightening.

A sensitive market

Farag noted that gold lost more than US$200 in a single day following these statements, before continuing its decline in the following days.

He indicated that gold markets have become more sensitive to global economic and political changes, explaining that prices can experience sharp rises or falls within minutes as a result of any influential statements or new developments, whether related to monetary policy or geopolitical conditions.

Farag added that the prevailing uncertainty in the global economy directly impacts the movement of gold, currencies, and bonds, noting that investors are constantly reassessing their positions in light of rapidly changing circumstances and events.

Investors who treat gold as a long-term investment typically do not incur losses, he said, explaining that the market has experienced similar downward trends in the past, but gold has always managed to recover its gains as economic conditions improved and global tensions eased.

Edited translation from Al-Masry Al-Youm

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