Gold balances in Egypt’s foreign reserves stood at $8.323 billion in February, compared to $8.337 billion in January, according to data from the Central Bank of Egypt (CBE).
The North African country’s net international reserves rose to $35.310 billion in February, up from $35.249 billion a month earlier.
Central banks added 39 tonnes to global gold reserves in January, according to a World Gold Council report. Turkey and China again led the charge among buyers, while significant sales were virtually non-existent.
The report expects another stellar year for central bank gold demand. While it fell slightly short of the annual record set in 2022, it was close. This generated even more attention as central bank gold demand has become a key support for gold.
“On the first and last of these questions, we have the beginnings of an answer. In January, central banks reported that they increased global official gold reserves by 39 tonnes. This was more than double the (revised) December net purchases of 17 tonnes, and the eighth consecutive month of net purchases,” said the WGC report, a copy of which was made available to the Egyptian Mail.
Gold prices poised for 6% rise
Gold prices are poised to rise as central banks purchase the precious metal and as strong retail demand in emerging markets bolsters prices, according to Goldman Sachs Research.
Goldman Sachs expects the yellow metal to climb about six per cent in the next 12 months to $2,175 a troy ounce.
The investment bank points out gold prices may trade in a range in the near term amid uncertainty about Federal Reserve interest-rate policy. Gold, which doesn’t offer yield, tends to be less attractive to investors when interest rates are higher. The downside risks to gold prices, meanwhile, are expected to be limited by several key factors.
“Investment demand for gold is yet to rebound. The recent lack of ETF purchases is probably because gold-ETF holdings were already high, particularly compared with the level of real (inflation-adjusted) interest rates,” Goldman Sachs said in a report.
The report pointed out that major disruptions, like the Russia-Ukraine conflict and the Silicon Valley Bank crisis in the US, sparked purchases of gold in recent years, and holdings have stayed elevated despite the rise in long-term US yields.
Recently, speculative positioning in gold by the likes of hedge funds has tracked the shift in long-term yields, according to Goldman Sachs Research. This suggests there’s more sensitivity to shifts in macroeconomic policy than to ETF holdings, which have continued to have outflows.
Sukuk issuances total LE12.8b
Egypt’s sukuk issuances totaled LE12.8 billion from 2020 to December 2023, according to data from the Financial Regulatory Authority (FRA).
The sukuk market has been on the rise thanks to growing demand as FRA carried out a number of measures to boost Egypt’s non-bank financial sector. FRA has enhanced the market’s supervisory and regulatory frameworks in a bid to protect all investors.
Egypt’s first sukuk worth LE2 billion was issued in 2020, then six other issuances were issued in 2023, according to FRA data.
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