Egypt's Financial Regulatory Authority launches first-ever gold investment fund

Egypt's Financial Regulatory Authority (FRA) launched the first-ever gold investment fund in the country in a bid to regulate the rather fluctuating market, the FRA said in a statement on Sunday.

The new fund will be run by Evolve Azimut, a joint venture between two private companies, Evolve Holding and Azimut Egypt, the statement added.

The net asset value of the fund's investments will be calculated based on the price of the gold declared by the Egyptian Stock Exchange.

The investment fund, meanwhile, will invest in 24-karat gold bars and list to the public investment certificates starting from 10 Egyptian pounds ($US 0.32) available for sale at post offices.

Investors will be able to redeem their certificates in cash or grams of gold.

At a time when the Egyptian pound dropped tremendously against the US dollar after controversial economic measures taken by the government, thousands of citizens resorted, over the past months, to purchasing gold to preserve the value of their savings in local currency.

Egypt has been ranked fifth in the world in the high demand for gold bars and coins. Last week, a report released by the World Gold Council revealed that demand for gold in Egypt doubled, amounting to seven tons in the first quarter of 2023.

The Egyptians' mania for gold, especially coins and gold bars, which can be resold involving little labour costs, witnessed an over 50 per cent rise by early May compared to the beginning of the year due to such demand.

However, the gold prices in the country fell by 7.7% during the trading week ending on Saturday evening, a few days after the government approved the exemption of Egyptian travellers from customs tariffs upon arriving in Egypt, according to local news reports.

The government's decree came after several attempts by travellers to traffic gold inside the country were foiled at Egyptian airports in recent weeks.  

The price of one gram of 21-Karat gold, the most popular in Egypt, is valued at 2,280 Egyptian pounds (about US$74) at the time of publishing.