As the cost of gold skyrockets in Egypt due to rampant inflation, locals are turning to silver as a means to safeguard their finances. A Reuters report highlighted this shift, attributing it to the soaring prices of gold in Egyptian pounds, which have reached unprecedented levels and made gold unaffordable for many. In response, people are embracing silver as a more accessible option to shield their wealth from currency devaluation.
The situation in Egypt is dire, with inflation rates reaching as high as 30 percent and the local currency depreciating by 50 percent against the dollar, with further devaluation expected. Amidst this economic turmoil, silver has emerged as a viable alternative to gold, with its price in Egyptian pounds more than doubling over the past year.
One Egyptian silver dealer referred to silver as “the new gold,” highlighting its attractiveness as an alternative investment. Individuals interviewed by Reuters echoed this sentiment, citing silver’s affordability compared to gold and its enduring value in uncertain times.
Historically, silver has served as a hedge against currency depreciation, mirroring the trends of gold but often with greater volatility. Despite its industrial uses, silver remains a monetary metal, and its price tends to move in tandem with gold, especially during periods of economic uncertainty. Analysts suggest that those bullish on gold should also consider silver as a wise investment choice.
Currently, silver appears undervalued, especially when compared to gold, as indicated by the historically wide gold-to-silver ratio. This suggests that silver has significant potential for growth, especially considering the projected increase in demand and supply deficits in the coming years.
Overall, the trend of Egyptians turning to silver amidst economic instability reflects a prudent financial decision, one that may also hold merit for investors elsewhere, including in the United States.
