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Egyptians abandon gold gifts as prices soar

Egyptians getting married have to cast gold gifts aside because of rising prices, but this appears to be a blessing for imitation gold traders.
Visitors look at displayed ancient jewelry during its official reopening a day after the Pharaohs' Golden Parade ceremony, National Museum of Egyptian Civilization, Cairo, Egypt, April 4, 2021.

CAIRO — Taxi driver Khaled Hussein had a hard time convincing the woman he intended to marry to drop the gold gift, a decades-old custom for engagement in Egypt.

"She refused at first, but after learning the price of gold she realized that it would be very hard for me to buy her any gold gifts for the engagement," Hussein told Al-Monitor.

Instead, he bought two silver rings with his name and the name of his fiancee engraved.

Not buying gold engagement gifts is a new trend in Egypt, one fueled by rising gold prices in the local and international markets.

The price of gold jewelry has risen to a level that has made it out of reach to most Egyptians, especially the younger generation about to tie the knot.

This price hike is causing social change and upending traditions in a country where gold used to be an indispensible part of marriage.

"Commodity price hikes and inflation have already changed the habits of most people, especially those related to engagement and marriage gold gifts," said Said Sadek, sociology professor at the American University in Cairo. He told Al-Monitor, "Some people have now realized that they can do without customs that have nothing to do with the basics of life."

Gold is central to the Egyptians' economic and social life. For millions of people, the precious metal is a currency of last resort, one that helps them protect their savings against inflation and fluctuations in the value of the national currency.

Egyptians usually hoard gold when its price is forecast to rise.

According to the Gold Section at the Egyptian Federation of Commerce Chambers, Egyptians bought 40-50 tons of gold in 2021.

This came amid expectations that the price of gold would rise sharply by the end of the year.

In the first nine months of 2021, Egyptians spent $1.3 billion on the purchase of gold.

But this is less about Egyptians who have savings and want to protect them, and more about the millions of people whose lives are turning upside down because of the slightest upward move of prices.

Initiatives are being launched nationwide to convince people to turn their backs on unnecessary objects, including the gold gifts for engagements.

Some of these initiatives are being launched in the Egyptian countryside, the part of Egypt where gold gifts used to be an inseparable part of marriage.

Other initiatives are taking the extra mile by not just discarding the gold gifts, but also the purchase of certain pieces of furniture that are now deemed unnecessary.

Ramadan Gouda, resident of Ruayhib village in the southern province of Sohag, proposed an initiative to reduce marriage costs by removing dispensable objects from the list of items the brides and bridegrooms are expected to buy for marriage.

The village residents approved the initiative Feb. 18.

"The number of [unmarried] men and women over 35 is growing as they are not abe to get married because of the high costs involved," Gouda told Al-Monitor. "A man has to have a fortune to get married these days."

The village residents are now demonstrating commitment to the initiative by buying only the basics when they get married.

Egypt witnessed the launch of a large number of such initiatives in the past years. They failed, however, in producing the effect the rise in the prices of gold has.

Gold prices have been on a steady rise in Egypt during the past eight years, partly driven by the rise in the exchange rate of the US dollar against the Egyptian pound.

Nonetheless, the sharp rise in the price of this precious metal, especially in the past few months, has caused a decline in sales, culminating in a state of general recession.

Gold shops are packed with glittering products of all types, but few people enter these shops to buy anything.

One jeweler said most of those entering his shop are doing so to sell their gold belongings to get money to buy food and medicines.

According to the Gold Section at the Cairo Chamber of Commerce, gold sales dropped noticeably in January and February because of the price increase.

"The recession has become even more intense with the start of the Russian invasion of Ukraine," Wasfy Amin, head of the section, told Al-Monitor. "The sales have stopped completely in some shops."

He expects continued political and economic problems around the world to continue to affect the price of gold for a long time to come.

Faux gold sellers are, meanwhile, tapping into this migration from genuine gold by increasing their sales and consequently profits.

An imitation gold bracelet sells in the market for a fraction of the price of the same bracelet if it is genuine.  

"Fake gold is usually a carbon copy of genuine gold," Gamal Mohamed, an imitation gold seller from downtown Cairo, told Al-Monitor. "Some people fail to spot the difference between the fake and genuine gold, even though they are not the same when it comes to prices."

Mohamed's shop has been witnessing a steep rise in sales for months now.

Some of his customers tell him that they decided to replace the genuine gold with imitation objects for their engagement because they are much cheaper.

Hussein and his fiancee did not go for the faux gold option, preferring the silver rings instead.

He said although silver is a lot more expensive than fake gold, he preferred it to compensate his fiancee for the genuine gold he could not buy her.

"Genuine gold has become out of reach for most people," Hussein concluded. "People should be changing their habits with this continual increase in prices."