What is currently happening in the Egyptian gold market is madness and extreme danger, and it is difficult to stop this hysterical wave and calm the demand for it, or even provide accurate advice on buying or selling it in light of this state of turmoil and chaos.
Either you say to people, “Slow down in buying after prices have reached exaggerated record levels.” Here, no one will listen to you after the so-called “herd policy” dominated the gold market. What happened in the stock market years ago.
Or you say that people are excused for rushing to buy the precious yellow metal in order to preserve what is left of their savings, in light of the upcoming fourth flotation of the Egyptian pound, a continuous rise in the price of the dollar, and the outbreak of a violent speculative market, in addition to the absence of available investment opportunities that generate profits.
Even the savings certificates offered by banks from time to time at an interest rate that is much lower than the core inflation rate, which exceeded 40%, has become useless and does not convince many savers in light of the continuous high prices of food and consumer goods, the erosion of the value of the currency, and a major and unmistakable economic failure. .
All I can say here, and warn against it, is that the gold market is on the verge of a bubble after prices have reached insane levels now, and with the price of one gram crossing the threshold of 3 thousand pounds, or nearly 100 US dollars. (One dollar = 30.95 pounds).
Here, the saver or investor in the precious metal is faced with two options, the best of which is bitter. Either selling at a loss after a corrective price wave occurs, if the person is a speculator, especially if the purchase was previously made at a high price, as is the case now, or storing gold for many years and betting on the price continuing its jumps in the coming years, and here the buyer locks up the liquidity available to him, perhaps for many years.
I cannot blame those who buy gold for their choice and behavior, but what is happening now I see as a great danger to the economy, investment, industry and production, and the sequestration of liquidity in unproductive assets, while the country desperately needs it.