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In Egypt, a woman usually receives a set of gold jewellery, commonly known as a “shabka”, when she gets engaged. But as the price of gold soared and the currency weakened, the demand for the precious metal also rose, and some Egyptians began to use silver instead of gold.
This trend is actually a sign that the Egyptian economy is in crisis. Data show that Egypt’s inflation rate of more than 30% in recent months, the Egyptian Central Bank has allowed the Egyptian pound (Egyptian currency) against the dollar depreciation of 50%, is expected to depreciate even greater.
The price of a gram of 21-carat gold has risen by more than 120 per cent to 3,875 Egyptian pounds (about $126) in the past year to 30 January, according to the Federation of Egyptian Chambers of Commerce.
Demand for gold coins and bars surged nearly 58 per cent between 2022 and 2023, according to the World Gold Council’s annual report.
A salesman at a silverware shop in Cairo said, “Silver has become the new gold.” A 51-year-old mother of three, Eman Mahmoud, said she had to forgo gold for silver when buying jewellery for a friend’s newborn. She noted that a small 18K earring weighing less than a gram exceeds 3,000 Egyptian pounds, while a silver necklace costs around 1,900. Despite the difference between the two, silver also remains valuable, she said.
Last month, the exchange rate for buying dollars on the Egyptian black market jumped as high as 71 Egyptian pounds, compared to the official rate of 30.85 Egyptian pounds. In recent days, the black market rate has fallen to below LE60 amid hopes of more funding from the International Monetary Fund (IMF) and investment from the UAE.
At this stage, about 60 per cent of Egypt’s 105 million people are living below or close to the poverty line. The conflict in Ukraine has raised the price of wheat and other imported goods as the pandemic has affected the main tourism industry. Recent attacks on Red Sea shipping by Yemen’s Houthi rebels have cut vital Suez Canal tolls. It has undoubtedly added insult to injury for the already struggling Egyptian economy.
The price of a gram of silver in Egyptian pounds has more than doubled in a year, but at around 47 Egyptian pounds it is still much cheaper than gold. Investors often hailed Bitcoin as the new gold before the price fell in 2023. But now in Egypt, silver is literally the “new gold.”
