Gold By Country:
2013 Demand: 57.3 tonnes
Jewelry/Coin & Bar: 41.8 tonnes/15.5 tonnes
Reserves: 75.6 tonnes
% of Total Forex Reserves: 20.54%
2013 GDP: $551 billion
Much like in world popular culture, the Egyptian people harbor nostalgia about their country's ancient empire, which placed the utmost importance upon gold (and had considerable access to it). Ancient Egypt was the site of the world's richest gold mining operations for literally millennia, keeping their unparalleled empire thriving in the absence of a stronger military. Egypt's gold tourism industry has been booming, partly due to the nostalgia mentioned above. In lieu of much-needed political and social stability, Egypt is aiming to address its economic solvency by increasing its gold reserves. Ultimately, Egypt's historical prestige—both during its dominance of antiquity and in light of more recent political instability—is a major driver of gold demand.
Egypt is home to innumerable museums and ancient monuments that the rest of the world cannot help but admire. In short, its identity as a nation is closely tied to its far-reaching history, within which gold is undeniably at or near the heart. The Ancient Egyptians were very familiar with gold, used it copiously in ceremony, and even capped the pyramids with brilliant “pyramidions” made from a gold-silver alloy known as electrum. Surely, as much as Egypt is associated with its pyramids, it has also long been known for its gold.
Further, Egypt has been embroiled in political upheaval and financial instability over the past several years, plunging the country anew into uncertainty. As has been observed elsewhere in the world, gold is commonly sought as a hedge against chaos and instability, prompting the Egyptian government (as well as the populace) to increase its holdings of gold.
Despite the incredibly high skill level of Egypt's jewelry artisans and goldsmiths, the beautiful value-added gold items they produce are sold for relatively low premiums over the melt value of their gold content. (This is in stark contrast to most other markets, where there is a considerable markup on all fabricated gold.) These reasonable prices contribute to Egypt's thriving gold tourism, not only appealing to Western visitors seeking culturally identifiable mementos, but also to travelers from the Middle East who would like to avoid the VAT (value-added tax) attached to the import of fabricated gold items. Traders and tourists alike recognize that these items carry a unique Egyptian provenance that is inextricably connected to the country's history, stretching back over five millennia.
Egypt's ancient legacy of metalworking, especially with gold, is not lost on the Egyptian people. For the most part, they embrace it, well aware of the tourism revenue the gold industry generates for the country. The maintenance of Egypt's golden history can also be seen in the proliferation of high-skilled jewelry fabricators in the country. It stands to reason that this profession would abound in Egypt, as goldsmiths in the region have been passing down their classical techniques and styles for eons. These master metalworkers carry on a unique brand of distinctly Egyptian gold fabrication, aptly reflecting the culture's seemingly eternal relationship with the lustrous metal.
Did You Know?
Popularized by the discovery of King Tutankhamun's intact tomb in 1922, Egypt is often identified with the gold funerary masks of the Pharaohs. King Tut's mask contained 11 kilograms of solid gold, along with a great deal of lapis lazuli. The Ancient Egyptians believed that the gods had skin of gold, the color of the sun, and hence they encased the royal coffins of the mummified Pharaohs in the precious metal. Another dazzling gold funerary mask of a later Pharaoh, Psusennes I, is also housed at the Cairo Museum in Egypt in a “Golden Age of the Pharaohs” exhibit. Egypt also has an expansive history of striking gold coinage as far back as the Egyptian empire of antiquity. During the 20th century, gold coinage depicting the last kings of Egypt were struck, including coins struck for king Fuad, as well as his enigmatic successor King Farouk.