Coinciding with the price of gold rising to its all-time high earlier this year; As its price recorded an increase of around 90% during 2023, Al-Masry Al-Youm interviewed Georges Michel, head of the professional trade union committee of jewelry trade and production workers, “Captain of Jewelers”. , during which he confirmed that the rate of increase in the price of silver during 2023 has exceeded the rate of increase in gold.
He pointed out that the increase in the price of gold undoubtedly affects the demand side of the gold market, that exchange rate movements have increased production costs and mechanization prices, and also contributed to increasing the cost of the work, pointing out that the price of gold is subject to several criteria, including the global price, the size of the supply and the price.Dollar exchange.
He said the goldsmith market has origins that prevail in relationships between traders, and as for gold fraud operations, he said they take place in areas completely remote from goldsmiths, and rely on social media “loopholes” to promote their goods.. And to the text of the dialogue:
■ Who values gold in Egypt?
Gold is priced in Egypt by “raw dealers”, who are around 10 traders who according to market customs are required to find a balance between the supply and demand sides. The price setting process is carried out based on supply and demand, the global screen price and the exchange rate, as well as taking into account the availability of raw quantities that meet the needs of demand at the time of price setting and with demand exceeding supply at the raw gold trader, the price of a gram increases to gather quantities of raw material through the desire of gold holders to sell when the price rises. The price, and with the accumulation of quantities of gold that meet the needs of the demand, a balance occurs between supply and demand, and the opposite is also true, since an increase in the raw material reduces the price of gold, and the trader of raw gold is considered at risk, due of the accuracy of the pricing process, through which supply and demand demand must be balanced and the price maintained Market stability.
■ Why did the price of gold record a new high in early January at the beginning of the year?
– As the payment of 25% savings bonds in banks approached, the demand for gold increased, waiting for greater liquidity in the market, and those who held it went to buy gold, hence the price of gold has increased, especially since it has achieved an increase of around 90% during 2023, so some consider it the beginning of the current year, an opportunity to convert liquidity into gold.
■ Is the market price of gold fair?
The price of gold is currently “overhyped” and that doesn’t mean it isn’t attractive to buy. Despite the rise, gold is considered a safe haven and continues to attract more liquidity to the market, amid investor confidence in gold’s upward trend.
■ Have gold producers been affected by the rise in the dollar’s exchange rate against the pound?
– The high price of gold in itself is not advantageous for the gold market, on the contrary it reduces demand, the transactions of market operators are gold for gold and the profit margin lies in production, which is the process of manufacturing material first and converting it into jewels, pounds or ingots, each of which has a certain production price, and the increase in the exchange rate leads to an increase in the price of mechanization and an increase in costs, all of which are factors that lead to a decline in demand, as well as an increase in the value of gold pendants, which are missing in the production process, and cooperation between market parties is the maximum support for the continued performance of the gold market with the necessary efficiency, despite the challenges of the past year, because the increase in the price of mechanization and production has increased the cooperation of the parties who already cooperated strongly, in order to bring mechanization and expansion of production operations to others, thus reducing the price of costs for beneficiaries, and at the same time keep pace with developments in competitive markets.
■ Has gold imports been affected by the increase in the exchange rate?
The expansion of contract manufacturing operations has led to a reduction in imports, of both raw and finished gold, as there has now been an expansion in the production of gold locally in grades and forms that match and exceed those “imported” after seeking help from external mechanization and relying on the expertise of the Egyptian worker in it, which helped to provide production in the local market is comparable to the imported one and is characterized by low manufacturing.
■ What is the rate of decline of gold jewelry imports in Egypt?
The rate of decline in foreign gold imports recently reached 60%, thanks to the expansion of import mechanization and contract manufacturing.
■ How efficient are Egyptian workers at producing gold?
The Egyptian worker is skilled in gold processing and his accuracy percentages are equivalent to those of foreign workers, but he is superior to the foreign worker in speed of execution, according to the testimony of the same foreign experts, and he is quick to respond and learn.
■ Do you bring foreign experts to Egypt?
– Yes, expanding production locally, instead of importing labor, providing mechanization, required the intervention of foreign experts to teach the Egyptian manufacturer new skills and mastery of modern mechanization, and when we import mechanization, we call a foreign expert to teach the new technical workers and how to make the most of modern mechanization. .
■ How do you choose workers in the gold market?
– The person who wishes to learn the profession is recommended and nominated by a member of the profession, and no one is accepted without knowing his “origin and background”, because the profession has its secrets and integrity, honor and honesty are considered the characteristics and most important factors for the success of those who work in the profession.
■ How is the contract manufacturing process carried out?
– There is no goldsmith laboratory that produces gold from A to Z; Everyone collaborates and each worker is specialized in carrying out a specific part of the work. The market is very cooperative and all parties know each other’s skills and craftsmanship in a certain part, and mechanization and its professionalism are one of the secrets of the profession, and about 70% of the gold produced in Egypt comes out of the workshops of the goldsmiths market in the Al-Mu’izz area in central Cairo, and these workshops produce for large companies and have been completed. Write the name of the company on the worksheet.
■ Did the decision to exempt gold from customs last year help limit price increases?
The exemption of gold from customs has limited the significant increase in prices over the last year: if this decision had not been taken, the price of a gram of gold was expected to reach £4,000 in 2023 due to the shortage of supply and high demand.
■ Are there any development processes currently underway on the market?
The Jewelery Trade and Industry Workers Union is carrying out a comprehensive development process to qualify workshops for the export of handicrafts, taking advantage of the low price of the production process in Egypt. We ask to grant subsidized loans to members of the profession, because they will significantly contribute to the ability of manufacturers to import machinery from abroad and will help the competitiveness of the product. Mechanization and skilled labor are the backbone of the real market and the capital of producers.
■ Warned of fake entities from time to time… Are there any gold fraud operations?
– The gold market periodically liquidates its parties, and the punishment of the gold market for one of its undisciplined parties is very harsh. In the event that one of the parties does not show up for the appointment, cheats something or does not say a word, the market parties alert each other, and he is no longer treated, and then he finds himself isolated, he has no one to turn to . deal with him, and is unable to continue the business, and that the trader who continues in the gold market is… Al-Sadiq is the one who has a word that does not change with the change of situations, and that counterfeiters have found in social media a loophole through which fraudulent jewelery can pass, as these stay away from the market and establish their projects in places far from the well-known gold markets and market them through social media, so they would have to deal with well-known people who have Experience and history in practicing the profession, and that the profits of counterfeiters are ultimately useless, because they lose large sums of money in exchange for products that they cannot market in the first place.
■ What are the rules that regulate the functioning of the market?
The work of the goldsmith market is governed by custom and tradition, and by the qualities of honesty, honesty and honour, because the carpenters insure each other for goods worth millions of pounds, without official documents, only for word of mouth. , you find that the market is regular and the rates of manipulation within it are negligible.
■ How has silver outperformed gold in 2023?
– Silver has already outperformed gold in 2023; While the rate of increase in the price of one gram of gold was recorded at 90%, the rate of increase in the price of silver exceeded 90.4%, as the price of one gram started in early 2023 with around 21 pounds, and at the end of the year it recorded 40 pounds, while the price of a silver pound is currently recorded at around 360 pounds, and all investors can benefit from the rising rates. It also helps small investors to save and invest their money safely as an investment method that is no less efficient than investing in gold, with a lower cost.
■ How to invest in silver?
– The price of silver production is high, and the foreign market is still higher than the Egyptian market for silver jewelry, but the profitable investment in silver lies in ingots and pounds, not in gold jewelry, and the local market has become highly competitive with the global gold jewelry market and is superior to many competing markets, while we still have time to increase competition with the Egyptian product in silver processing.
■ Finally, what are your expectations regarding the price of gold in the coming period?
The general trend of gold is upwards, although it has seen some declines at the moment. I always recommend buying gold and not selling it unless necessary, and that usually Friday and Saturday of each week are a buying opportunity for the small investor, and Monday is an opportunity to sell, because the supply increases relatively on Friday, on Saturday the price decreases slightly and then rises again when the market returns to work on Monday after the weekly break on Sunday.
2024-01-14 00:31:00
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