“A gram would have reached 3,500”.. The effect of customs exemptions on the stability of gold prices

Since the official launch of the customs-free gold imports initiative, gold prices have witnessed stability and quiet trading after the violent movements that reached gold prices to historical levels.

The price of gold in Egypt witnessed a continued decline, despite fluctuations and trading in a limited range in the global market.

This comes in light of the decline in fears and the slight return of confidence in the Egyptian markets, which helped the decline in gold prices.

Dr. Nagy Farag, advisor to the Minister of Supply for Gold Affairs, said that the Ministry of Supply proposed exempting expatriates in Egyptian airports and ports from customs for entering gold in all its forms, such as: Bullions, pounds, and artifacts, and as a result, about 194 kilos of gold entered the country in just a month, which led to a strong balance in the market and equilibrium in prices.

He added, “This number may double in the coming months, and this is a very good thing for the Egyptian national economy and the gold industry, because it creates a kind of good competition with the local product, which benefits the local product so that it is at the level of competition”.

Price level 

He continues, “We were noticing unjustified and provocative daily rises in the price level, but we have been witnessing stability in prices for a month, and gold has decreased today by 30 pounds, and its price in the market is 2290 pounds, after it reached 2850 pounds in a period of time.”

 The advisor to the Minister of Supply for Gold Affairs continued: “The price of gold would have exceeded 3,500 pounds, and therefore this decision created stability in the gold markets.”  

Hard currency 

Also, gold is an alternative to hard currency, and therefore the stability of the gold price helps to stabilize the price of the dollar in the local market.

He explained that the customs value is very high in relation to gold, as it was applied to gold, and at the present time, only 14% is applied to the workmanship and the 200-gram grid. 2150 pounds are paid, which is a very symbolic amount.

Positive developments

There are positive developments in the local market during the last period that helped calm and stabilize the gold markets, the most important of which was the stability of the exchange rate of the pound against the dollar in official banks at 30.95 pounds per dollar, despite rumors and calls by international institutions to achieve flexibility in the exchange rate and record a new decrease in the levels of the pound.

In another side, the acceleration of the government's moves in the issue of exiting state-owned companies to provide dollar liquidity to fulfill its obligations also contributed to allaying fears in the markets, and this was reflected in gold. 

The Egyptian government obtained $175 million from the offerings program by selling its entire stake in Pachin at a value of $25 million and 10% of its stake in Telecom Egypt at a value of $150 million.