Egypt’s gold industry is split on whether jewelry demand needs saving at all

Three years of record gold prices and economic uncertainty have shifted demand away from jewelry and toward bullion, coins, and regulated investment funds. The Gold and Precious Metals Division of the Federation of Egyptian Industries (FEI), headed by Ehab Wassef, is preparing to launch an initiative to redirect growth toward value-added jewelry manufacturing, but industry sources disagree on whether it’s needed.

The initiative will support factories, workshops, and employment as part of the FEI’s strategy through 2029. Wassef says the sector’s future depends on “the industry’s ability to produce jewelry with quality and designs that compete in global markets,” with manufacturing upgrades, product development, SME support, and workforce training forming the core of that strategy.

The data shows how far the shift has gone: The number of investors in gold and silver funds reached 329k at the end of June 2026, up 14% q-o-q, with assets under management at EGP 9.35 bn, according to Financial Regulatory Authority (FRA) data. Retail investors account for 71% of the total, with more than 70% of them aged between 20 and 40. Gold funds account for almost all of the segment, with 306.5k investors holding EGP 9.2 bn across seven funds, while Egypt’s first two silver funds, launched in 2Q 2026, have already attracted 22.3k investors. Precious metals funds are now the fastest-growing segment of Egypt’s EGP 411 bn mutual fund industry, expanding 30% q-o-q in 1Q 2026 while delivering the sector’s strongest average return at 20.4%.

The structural shift runs deeper than higher gold prices. Hany Milad, head of the Gold and Jewelry Division at the Federation of Egyptian Chambers of Commerce (FEDCOC), says the industry lacks hard data measuring exactly how much demand has migrated from jewelry to bullion, but the direction is clear. “Bullion, in the form we see today, simply did not exist five years ago. Successive increases in gold prices have encouraged this shift,” he says.

An entirely new class of buyer has entered the market as well, Milad says. “A new segment of customers has emerged that entered the gold market to hedge and preserve value, not to buy jewelry for adornment, as used to be common,” he says. Some savers “preferred to convert their savings from bank deposits or even from real estate investment into gold,” he adds. Even so, he rejects the idea that jewelry demand has collapsed. “There are still those who buy bridal sets (shabka) and jewelry, albeit fewer in number,” he says.

Milad places responsibility for recovery on the manufacturer, not the market conditions. “The ball is in their court, and they have to determine the tools that can restore balance to the market,” he says. His priority is international, rather than local: “The idea is not to establish factories outside Egypt, but to manufacture products locally and export them, so that the national industry benefits.” He frames the shift as a global phenomenon rather than a local failure: “We are not facing an internal defect or a crisis that can be treated with local measures only, but rather global economic conditions that have made gold a tool for hedging and preserving value.”

But some argue that the premise behind the FEI initiative is already outdated. Mamdouh Abdallah, board member of the FEI’s Gold Division and chairman of Kirmena Jewelry, argues that jewelry demand has already rebounded. “We don’t need anything. On the contrary, we currently have an unusual demand for jewelry,” he says.

Lighter products are driving sales: Abdallah attributes the recovery to manufacturers redirecting production toward the domestic market rather than exports and redesigning products to make them more affordable. Lighter-weight products have played a key role. “What used to weigh 10 grams now weighs around 5 grams,” he says, allowing consumers to buy designs comparable to European jewelry “but with Egyptian manufacturing costs.”

OUR TAKE- Both perspectives are correctly describing a market in transition. Milad has identified the structural shift: a new class of buyer has entered the gold market for financial reasons, rather than ornamental; that buyer is unlikely to turn to jewelry like the FEI wants. Abdallah is also right: manufacturers who have adapted to lighter products with competitive pricing are also finding demand. The FEI initiative will likely work best for those manufacturers who haven’t yet adapted, rather than trying to entice a buyer focused on investment, not adornment.