2023-05-10 13:59:35
With the rise in inflation rates in the country, which exceeded 40% last February, before retreating after that, many citizens are looking for a real refuge that protects their money from the current and upcoming eroding pressures.
In the following lines, (The Week) provides some important details about certificates of savings in Egyptian banks and gold in goldsmiths before purchase.
The meeting of the Central Bank of Egypt is a few days away
A meeting of the Bank’s Monetary Policy Committee is expected Central Al-Masry on Thursday, May 18, in order to determine the pace of interest rates that recorded a thousand basis points until today, bringing the deposit rate to 18.25% and lending to 19.25%, amid the rise in consumer prices, which recorded 31.5% today, according to the latest data of the Central Agency for Public Mobilization and Statistics.
Savings certificates
The Egyptian banking sector offers a variety of savings certificates with a monthly return of 22%, 20% and 19%, with an advance payment of up to 39%, in order to preserve depositors’ money, which has already lost 95% of its value during the period from March 2022 to May. 2023, as the Egyptian pound fell from the level of 15.76 pounds to 30.95 pounds, after losing about 15.19 pounds, and this gap is on the way to widening in the coming days.
gold prices
Regarding gold prices, the citizens’ refuge in these economic conditions, after the increased demand for their purchase by citizens, they jumped from the level of 880 pounds in 21 karat during early March 2022 to the level of 2550 pounds in the current month of May, an increase of 1670 pounds, and it is subject to fluctuation in The Egyptian market is between ups and downs throughout the trading times.
Gold prices next fifty years
Many believe that gold It is the best tool for hedging against inflation, and this comes in light of the trend of a wide queue of citizens towards buying large quantities in the current times of economic volatility, but the truth behind the spread of this habit in the world goes back to an old story, to the Sunday evening of August 1971, when he boycotted Then US President Richard Nixon made one of the most popular TV shows of the era, to announce that he would end the possibility of converting every dollar owned by any individual, corporation or government into gold.
Prior to that sudden decision, central banks around the world were able to convert their stock of US dollars from cash reserves into gold bars at a fixed rate of $35 an ounce.
Months after the decision, the inflation rate in the country jumped to its highest level, at any time U.S. dollar It fills the treasuries of foreign central banks, while the United States filled Fort Norks, the main treasury of gold reserves in the United States of America, with gold bullion, so that the price of gold during that period doubled at least.
This is the obvious link between gold And inflation led many to believe that gold is a good way to hedge against inflation, although it is an available tool in the event of a decline in the local currency, but there is a ceiling for its continuity that it cannot overcome.
Market analysts say that gold’s inconsistent correlation with both the stock market, savings certificates, and inflation makes it difficult to imagine how it will perform over the next fifty years in Egypt, especially since it is linked to its price on the International Metal Exchange, in which gold faces unprecedented competition. Before, due to the advent of cryptocurrencies.
It always could be gold A hedge that is more consistent with inflation in the coming years in the country, and all you have to do is search somewhere other than history to find support for such a possibility. The door is open to ignoring the past to prepare to enter the dream of how gold and inflation will move in tandem in the near future.
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