Gold is the safe bet for Egyptians to protect their savings amid the successive economic ups and downs and the shrinking value of the Egyptian pound against US dollar as a result of the conflict in Ukraine.
A recent report by the World Gold Council highlighted the recent scramble for gold coins and ingots in Egypt.
Demand for gold here doubled to 7 tons in Q1 2023, making this country the fifth largest customer for the precious metal.
As more Egyptians want to invest in gold, the General Authority for Financial Control (GAFC) announced the launch of the Gold Investment Fund.
The gold Investment Fund is a license granted by the Financial Regulatory Authority (FRA) authorising a firm to sell gold investment documents backed by gold reserves through dealing with companies that buy, sell, store and secure gold savings. The company must be FRA licensed to guarantee customer trust.
The fund will give investors an alternative to investing in gold without having to buy the metal, thus controlling the traditional gold market, increasing transparency and protecting investors from fraud whether buying or selling.
The fund will issue the investor with a document, stating how many grammes the buyer possesses. Small investors can purchase small quantities without the need to buy an ingot. Moreover, the fund aims to diversify investment and savings options to meet the various needs of all categories of investors and expand financial inclusion.
The fund has come at the right time as local gold prices fluctuate due to high demand and shrinking supply.
The fund allows the purchase of gold from mining companies which produce only ingots. The company authorised by the FRA then sells gold investment documents. Therefore, intermediary operations have become limited, bringing balance and transparency to the market.
The launch of this fund will strengthen Egypt’s position as of the most important financial markets in the region. It is also evidence of the state’s continued efforts to develop the non-banking financial sector and nurture a diversified and suitable investment environment.
The gold investment fund provides secure custody services at accredited locations registered with the General Authority for Financial Supervision. This ensures the protection of investors’ gold holdings from theft or damage, bolstering trust and safeguarding their assets. Investors can choose between cash or in-kind refunds, providing flexibility in managing their investments.
This fund is new to Egyptian society, so the media can create public awareness of the advantages of investment in gold investment.
Mohamed Fahmy is the editor-in-chief of The Egyptian Gazette and Egyptian Mail newspapers
Discussion about this post