New security for gold

Ghada Raafat , Sunday 23 Jan 2022

A new system for authenticating gold jewellery will soon be in place, with positive effects for the Egyptian market.

photo: Reuters
photo: Reuters

Gold jewellery sold in Egypt will soon be getting new proof of authenticity in the shape of a laser stamp, according to Minister of Supply Ali Moselhi who announced the change early this week.

The new system, which should come into effect within a year, will replace the traditional iron stamp by a laser one, with the new coding acting as a “birth certificate” for each piece, Mohamed Hanafi, head of the Chamber of Metallurgical Industries at the Federation of Egyptian Industries, told Al-Ahram Weekly.

Together with the laser stamp there will also be a QR code for each piece carrying data such as number of karats, weight, and producer, he explained.

The announcement of the new system had some people worried that gold jewellery already in their possession might not be recognised should they wish to sell it. “Does it mean we have to take all our jewellery to be restamped,” asked Maha Saleh, a 55-year-old Cairo housewife who worried about the hassle or the fees she might have to pay.

But a Ministry of Supply statement said that gold jewellery already owned by retailers or consumers is considered valid and does not require any action to be taken.

Hanafi said the new system would not affect consumers and they could still sell their old gold jewellery bearing traditional stamps at any time. The new practice was designed to prevent the sale of counterfeit gold and would eliminate theft, he said.

A laser stamp cannot be forged, and a lot of information can be stamped on fine pieces of jewellery, he said. Stamping jewellery, especially very fine pieces, with the conventional iron stamp can damage it, and this can be avoided by the use of lasers.

The laser stamp will be used along with the traditional stamp for the current year. Starting in 2023, the laser stamp will replace the old one.

Hanafi hopes the new system of authentication will enable Egypt’s gold jewellery to regain the status it held in the early 1990s when the gold market in Egypt was flourishing. Arab visitors to Egypt used to buy large quantities of it during their visits to Egypt, and the country also exported gold jewellery to these markets.

However, instances of forgery together with various fees rendering the jewellery more expensive had dampened the market.

Ihab Wassef, deputy head of the Gold Division at the Cairo Chamber of Commerce, agreed that the new system would benefit consumers, who would have ample time to adjust to it.

Wassef said Egypt’s jewellery exports had fallen due to fees imposed on exports that had made gold items more expensive. Customs duties imposed on production inputs such as machines, moulds, and precious, semiprecious, and synthetic stones had also increased costs, causing the industry to lose its competitive edge in Arab markets.

He said that countries such as Italy, China, Dubai, Singapore, India, and Turkey were today exporting gold jewellery at competitive prices. Egypt had an advantage in its trained and inexpensive manpower, but this was not being fully utilised.

“We are limited by selling to the local market, which is characterised by seasonality,” Wassef said, adding that Egypt also exported raw gold with no value added. If custom duties and other fees were lower, he added, the country could find its way back onto the global map for the production of gold jewellery. 

*A version of this article appears in print in the 20 January, 2022 edition of Al-Ahram Weekly.

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