In the wake of recent economic events, Egyptians like myself are pondering what the future holds and how our everyday lives may get affected if current challenges persist. Unfortunately, the short answer is, “we are not entirely sure.”
Multiple promising and discouraging factors are at play here, making it difficult to provide clear-cut answers. However, one thing has become apparent; at times of economic uncertainty, people all over the world turn to gold to preserve and protect their wealth.
For thousands of years, gold has been utilized as both a medium of exchange and a valuable commodity, withstanding the test of time as a means of preserving wealth. In the last 22 years, the price of gold has increased five folds from around $400/Oz to recently breaking the $2,000/Oz mark.
The Egyptian pound, in comparison, witnessed an eight-fold depreciation in the same period. This means that the one gram of gold you bought in the year 2000 is now much more valuable compared to the pound you chose to deposit in the bank.
On a global level, high levels of inflation and global debt have been driving paper currency’s value down, as equity markets witness alarming volatility on the back of the 2007/2008 financial crisis and the Covid-19 pandemic.
That’s why gold is considered one of the most secure and highly liquid investment options available, as the chances of gold losing its entire worth are slim, despite temporary fluctuations. For this very reason, investors have been resorting to the yellow metal at times of uncertainty, more so than equity and debt market instruments, which are susceptible to several economic and geopolitical shocks.
When it comes to Egypt, we have all the soaring inflation and the resulting devaluation of the Egyptian Pound. The expectations are that, in the short term, we may see even more depreciation. That’s why now is high time for Egyptians to start investing in gold and other precious metals-backed investments to safeguard their wealth.
You’re now probably wondering, should I run to the closest jewelry store and buy gold? How do I go about metal-backed investments?
The answer to your first question is no, not really – let me explain why.
Gold jewelry and coins are a comparatively expensive form of gold investment because they involve high mark-ups and workmanship costs that are never retrievable upon resale. Jewelry and coins are also less pure than gold bars and therefore hold a lower valuation and are less liquid compared to gold bars, as they require longer recycling processes to sell.
Now that you’re buying gold bars, the next question here is from whom?
Investing in gold bullion is perhaps the most common and well-known form of gold investment. Gold bullion is a bar consisting of the purest form of gold, certified to meet international standards of weight, purity, and origin.
They cost less than jewelry, are more liquid, and are of higher quality. They also follow the international spot price of gold, are easily traded, and are widely accepted in over-the-counter markets globally.
Until recently, LMBA and RJC-certified gold, which meet the above standards, was not readily available to Egyptians. More on that later.
Founded in 2005, the Responsible Jewelry Council (RJC) brings together producers, refiners, traders, cutters, polishers, manufacturers, wholesalers, and retailers to ensure that the production, processing, and trading of gold is done through a regulated gold supply chain. RJC certification requires its members to conform to specific business practices communicating a number of regulations relating to human rights, labor standards, environmental impact metrics, and business ethics.
Moreover, the London Bullion Market Association (LBMA) is an international trade association responsible for setting up standards in the global bullion market. Its standard, the London Good Delivery standard, is universally acknowledged as an accepted benchmark for the purity, quality, and physical appearance of gold bars. Members of LBMA also include traders, refiners, miners, and logistic service providers.
What are some innovative ways you can invest in gold, other than buying physical gold bars?
In the past 5 years, digital gold platforms have become one the fastest growing mediums of gold investment globally.
The real advantage here is that digital gold can give you access to investment-grade gold with minimum denominations without the need to physically buy and store it. Gold can be stored securely by the seller in vaults that meet global standards and are insured by internationally recognized insurance providers. You can, however, still request the delivery of your gold holdings in physical denominations at any time with the help of global logistics and delivery providers.
Globally, during the past 5 years, digital gold platforms have become the fastest-growing mediums of investing in gold.
Another way of investing in gold is through gold-backed financial products, whose primary underlying asset is investment grade and internationally certified gold.
Like digital gold, gold-backed financial products let you invest directly in gold without the need to buy or hold the physical commodity.
Gold-backed financial products are offered by financial institutions and include gold mutual funds and gold-backed loans, among a myriad of other innovative financial products.
From refineries to technology providers, wouldn’t it be great if all these central elements of the precious metals supply chains should ideally come together to create one full-fledged precious metal ecosystem?
The precious metals ecosystem caters to every component of the industry’s supply chain, including but not limited to LBMA and RJC-certified refineries, compliant gold trading houses, globally warranted assay labs, logistics and insurance services. The ecosystem also includes collaborations between relevant regulatory authorities and the capital market to formulate applicable frameworks and procedures that facilitate the provision of innovative and value-added precious metals-backed financial products.
Now, it’s time for the big question: are all these options available in Egypt? The answer is YES! Finally! And Evolve Holding is at the forefront of it all.
Evolve Holding is a purpose and impact-driven investment company leading the development of a robust precious metals ecosystem in Egypt. Under its auspices, Evolve strives to enable financial institutions to provide alternative and innovative precious metals-backed investment and financial products to support the monetization of frozen capital across the country.
By collaborating with regulatory authorities and government institutions, Evolve spearheads efforts to create new innovative frameworks and initiatives aimed at governing a full-fledged precious metals ecosystem in Egypt.
Evolve has also been engaging with banking and non-banking financial institutions that offer saving, lending, investment, payments facilitation, and digital commerce to offer transformative and accessible precious metals-backed products to all segments of Egyptian society.
By employing a holistic, high-tech, and customer-centric approach based on trust, compliance, and transparency, Evolve managed to build the necessary infrastructure for a precious metals ecosystem by establishing a number of subsidiary companies, specifically operating in crucial ecosystem pillars.
Gold Net Trading procures globally compliant precious metals and sells them to retail and institutional clients, serving as a compliant market maker for investment and financial products.
Evolve Logistics insures, stores, and delivers physical gold and precious metals while providing logistical services for investment products using the latest global standards.
Evolve Labs specializes in verifying the purities of gold flowing through the ecosystem to guarantee product integrity.
And mngm is Evolve’s flagship digital precious metal platform that enables you to securely purchase, sell, store and request the delivery of fully compliant gold in multiples of 0.1 gram with one click of a button.
mngm offers you fully compliant gold, with an investment grade purity of 999.9 (24k gold that conforms to international sourcing standards and is insured by the most trusted insurance providers.
Through mngm, you can accumulate your fractional gold holdings with minimum purchases of 0.1 grams or buy physical gold with minimum purchases of 50 grams. Your fractional gold holdings are 100% backed by physical gold.
Upon reaching a minimum of 50 grams, you can request the secure delivery of your gold or opt for storage. Irrespective of which option you choose, you will remain the sole legal owner of the gold.
The gold price on mngm also reflects the real-time spot value of gold, which is based on the international price of gold and its local market dynamics. To support your investment decisions, mngm provides you with timely insights and research on the global and domestic precious metals market. mngm also empowers Fintechs to offer their own precious metals platform.
We all need alternative ways to invest our hard-earned income and protect our wealth in such volatile times.
Through Evolve Holding and its subsidiaries, Egyptians can now build and protect their wealth using new and innovative financial products for generations to come.
And at the center of it all is the yellow metal we call gold.