The gold market is weighed down by insecurity and market stagnation, Sherine Nasr reports For two weeks now, gold shops, workshops and factories have been closed not only because demand has dwindled to unprecedented lows, but also because those in the business still have serious concerns over the security situation in the country. Their concern, according to Rafik El-Abbasi, head of the gold division at the Egyptian Federation of the Chamber of Commerce, emanates from the fact that 50 shops in the area of El-Sagha gold market have been looted and destroyed. "It is the habit to keep gold items in fortified safes. Those who had their items on display lost their assets," said El-Abbasi, who added that although goldsmiths have not been open about the volume of gold looted, it is certain that the losses rise to the level of millions of pounds. "We know for sure that gold items in 10 of those 50 shops have vanished. Although no figure has been confirmed, this stands for tens of kilogrammes of gold," said El-Abbasi. This week, one ounce -- almost 31 grammes of gold -- is being traded for $1,400, down from $1,420 for the same quantity two months ago. On the local market, a gramme of 21-karat gold is sold for LE220. All is not lost, however. "If the market revives, the price will increase by LE10 per gramme," said El-Abbasi. Further, the past few days have given goldsmiths the chance to increase security measures for their once safe shops. For example, the old alleys leading to shops have now been shut with large iron gates that can be opened only by the shop owners themselves. Others have hired guards to protect their shops by night. "Safeguarding our property is a priority now, since the police are not in shape yet," said goldsmith Aziz Mounir, who added that it is not difficult to track down those who broke into the shops as the looting has been recorded by closed-circuit cameras. "Police stations are still not operating and we were told by the police that it is still very risky for them to go after these criminals," said Mounir. Other worries include sending gold items to the Stamping Authority to have them approved. "Securing these trips to the authority and back is a major concern. It is even more hazardous to those who deal with the authority's branch in Beni Sweif in Upper Egypt," said Mounir. The situation in Alexandria, which hosts the second-largest gold market in the country, as in Upper Egypt, is equally bleak. Attacks and lootings have also been reported. As for the Red Sea resorts of Hurghada and Sharm El-Sheikh, which are among the safest areas, the absence of tourists has struck the gold market there badly. "The security situation is just fine, but tourists have left. I have not been able to make a single sale for days now," said Emad El-Basha, owner of a gold shop in Hurghada. Indeed with the passing of the days, many goldsmiths are starting to worry about the lack of activity in the gold market. According to El-Abbasi, the losses are cumulative as they represent the retail sector as well as the manufacturing sector. "On average, the amount of gold circulated on the market per month is estimated at 10 tonnes. This means that losses in the retail sector may amount to LE30 million per month," said El-Abbasi, who added that, in times of crises, the gold market is known to be the last to restore its vitality. "At the moment, buying gold is the last thing a consumer will consider. When other economic activities are back to normal, the gold market will follow." In the manufacturing sector, the situation is no better. The number of workers in a gold workshop varies from 10 to 60. "The majority of workers are handy craftsmen with large salaries," said Antoune Raouf, owner of a major gold manufacturing workshop. "Work has stopped, yet I have to keep paying out LE30,000 weekly, in order to maintain the shop and to pay the salaries of around 60 workers," said Raouf, who added that he will not consider laying off staff since he would not be able to replace them once the market picks up again. If big workshops can afford to pay staff in times of crisis, workers in smaller workshops still face the possibility of getting sacked. "The stagnant market has been detrimental to smaller workshops that cannot withstand the current situation for long," said Raouf
