By Areena FxEgyptians are increasingly turning to silver as a means to safeguard their finances amidst soaring inflation and the skyrocketing price of gold in local currency. A recent report from Reuters highlights this trend, attributing it to the combination of rising prices and a weakening currency, which have pushed gold prices to unprecedented levels, making it unaffordable for many Egyptians. To counter the effects of currency devaluation and protect their wealth, more individuals are opting for silver as a more accessible alternative.
This shift towards silver is being described as indicative of an economic crisis, with inflation in Egypt reaching as high as 30 percent. The Egyptian central bank’s decision to devalue the pound by 50 percent in dollar terms has further fueled concerns, with expectations of more devaluation looming.
The appeal of silver lies in its affordability compared to gold, with many Egyptians finding it to be a more practical option. As one Egyptian noted, while the price of gold has become prohibitive, silver still retains its value and offers a more accessible means of investment or savings.
Furthermore, like gold, silver has a history of preserving wealth against currency depreciation. Over the past year, the price of silver in Egyptian pounds has more than doubled, underscoring its attractiveness as an investment vehicle.
Despite its significant industrial and technological uses, silver remains a monetary metal at its core. While its price may be more volatile in the short term, it tends to follow similar trends to gold over time. In fact, silver often outperforms gold during periods of economic uncertainty, as seen during the pandemic.
The article also highlights the undervaluation of silver compared to gold, as evidenced by the historically wide gold-to-silver ratio. This suggests that silver has considerable potential for growth, especially considering projected increases in demand and ongoing supply deficits.
In conclusion, the decision by Egyptians to turn to silver as a hedge against inflation and currency devaluation appears to be a prudent move. With silver significantly underpriced and the outlook for gold bullish, silver may also present a viable investment opportunity for others, including Americans.