Seeking refuge in gold GOLD registered record sales during the third quarter of 2008 according to The Gold Demand Trends report released this week by the World Gold Council (WGC) regional office. The report indicated that Egypt's gold consumption in tonnage increased by four per cent to reach 22.2 tonnes during the third quarter compared to 21.4 tonnes during the same period last year. Likewise, gold sales increased by 33 per cent, reaching $8 billion up from $6 billion during the same period last year. The Gulf region, Saudi Arabia and United Arab Emirates (UAE), to be exact, topped the list. Gold consumption in the two countries reached 34.7 tonnes and 26.7 tonnes respectively and their sales increased by 51 per cent and 56 per cent respectively. Internationally, the dollar demand for gold reached an all time quarterly record of $32 billion in the third quarter of 2008 as investors around the world sought refuge from the global financial turmoil. Tonnage demand was 18 per cent higher than a year earlier. The gold consumption figures for the world show retail investment demand rising by 121 per cent to 232 tonnes during the third quarter of the year, with strong bar and coin buying reported in Swiss, German and US markets. There were also gold shortages among bullion dealers across the globe, as investors searched for a haven. "Overall, the third quarter saw Europe reach an all time record of 51 tonnes of bar and coin buying and France became a net investor in gold for the first time since the early 1980s," said the report. Jewellery demand in the Middle East, which accounts for more than 90 per cent of total consumer purchases, rebounded during the same period after a softer demand during the second quarter of 2008, which was negatively affected by a high gold price and price volatility. According to Sameh Nabil, a WGC consultant in Egypt, demand for jewellery in the region is influenced by several key factors; price levels, key gifting occasions and the advertising campaigns that tend to accompany them. "In Egypt, one of the biggest markets in the region, jewellery demand benefited from the shortage in bars and coins. Consumers chose to buy jewellery pieces for investment purposes. This shift in demand particularly benefited low margin and low production cost items such as bangles and chains," said Sameh. Tying up with neighbours AS PART of a comprehensive plan to mitigate the impact of the international economic crisis, Egypt has been engaged in dialogue with key trade and investment partners. This week, Rachid Mohamed Rachid, minister of trade and industry, ended a two-day visit to Greece where he met with top Greek officials and private sector representatives to discuss the means to further strengthen bilateral trade and business opportunities in Egypt. One-to-one meetings were held with the CEOs of vocational schools in Greece, a large Greek petroleum company, an automotive manufacturing company, a major supermarket chain, in addition to a major Greek food processing company. "Egypt will not adopt a conservative approach of 'wait and see'. I believe the best way to address the anticipated economic slowdown is to identify our priorities in the bilateral trade and investment arena," said Rachid. Both sides discussed the possibility of establishing a speedy maritime line to facilitate transportation of goods and save time. During his visit, Rachid underlined the Egyptian government's plans to increase investment in infrastructure as a means to contain a possible recession. In the meantime, the government has been closely working with the private sector to identify the impact of the international financial crisis on each sector and provide necessary support. Cooperation in research and development between both countries was underlined. Transfer of know-how in the wood and leather sectors and further cooperation in the field of small and medium enterprises (SMEs) were stressed during Rachid's meeting with Christos Folias, Greek minister of development. It is worth noting that bilateral trade between the two countries stood at 412.6 million euros in 2007. Egyptian exports, estimated at 307.9 million euros, include mineral fuels, fertilisers, iron and steel, fresh produce, plastics, ceramics and textiles. Imports from Greece, reaching 104.7 million euros, include cotton, tobacco, electrical machinery and vehicles. Egypt is home to 70 Greek projects which are worth some LE936 million, mainly in the banking and food sectors.
