What is in store for investors and consumers of the yellow metal, Sherine Nasr asks Gold hit an all time record high price of $1,217 (approximately LE6,656) per ounce on 3 December (an ounce is 31.1 grammes of 24 carat gold) before it came down to $1,160 (LE6,345) the following day and hovered around the same price during the week. "This increase in gold prices is the first of its kind in the international market. Gold has never hit these record highs before," commented Rafik Abbasi, head of the Precious Metals Division at the Federation for Chambers of Commerce who added that the explanation is not simple as to why gold prices hiked that much overnight. "Even market experts were divided on the reasons behind these increases," he said. Interestingly, the price did not escalate after Dubai's debt crunch was made public. "In these circumstances, it was most likely that gold prices should pick up again, but they did not," said Abbasi. Abbasi said what helped sustain a high price for the yellow metal over the year was the fact that governments and central banks started to build up gold reserves as a hedge against escalating fears of inflation following the global economic crisis. In April, for example, the BBC reported that China secretly increased its gold reserves by 75 per cent to more than 1,000 tonnes through the purchase of domestically produced gold. According to Abbasi, the World Bank (WB), in its attempt to steady the gold market, provided 400 tonnes in November, the bulk of which were purchased by India and Sri Lanka. "Obviously, gold has become the most favourable investment, not only for individuals but also for governments," he said. "Although it is hard to detect where gold prices are heading to, it is most likely that they would continue at a high level and may possibly pick up again." In Egypt, gold prices rested around LE130 per 21-carat gramme all throughout last year before it began its march upwards to reach LE150 in mid-year and continued to rise to hit LE186 Thursday. During the week, the price went down a little, ranging between LE170 and LE175. However, as the price continued to fluctuate, even during the same day, that caused further disruption to the market and left it in a state of uncertainty. For most Egyptians, buying gold at that price is a far off wish. Although the market was supposed to revive during last week's Eid holidays -- a good occasion for weddings and celebrations -- sales were not at their usual for this time of year. "The high price has driven a large segment of consumers out of the gold market," said Abbasi who added that although gold is a safe investment for businessmen who trade on gold bars, for the layman, buying gold is out of the question. According to Shafik Arsani, a gold manufacturer and retailer, the local market has been suffering a state of recession during the year. "Consumption has fallen almost by half, which negatively affected a long chain of other industry-related services," said Arsani. Retailers, for example, are not only hit by slow market movement; price volatility during the day is also causing confusion. "Many of them are refraining from conducting big deals lest they should make big losses," said Arsani. Small gold manufacturing workshops have been hit the most, many of whom had to shut down, lay off highly skilled labourers or change activity altogether. "As demand is weak, these workshops could not survive for long. Unfortunately, these are the factories where the best designers and handicraft artisans are found," said Arsani who added that many quality artisans have turned to manufacturing fake ornaments to survive in the market. Major manufacturing workshops are also not immune. In addition to slower demand, incidents of fraud pose a growing risk to big factories. Arsani explained that some small workshops cheat on the amount of gold needed to make an item of a certain carat and they sell it to big factories. "As a result, big factories need to buy extra amounts of pure gold to even out the carat of the fraud. Production costs thus increase while profitability becomes marginal," said Arsani. Indeed, many big names in the market have turned towards less hazardous and more stable and profitable activities, such as tourism, construction and trade. According to Abbasi, because there has not been much trading in the local market, a good deal of the yellow metal is shaped in bars and sold to other countries, mainly Dubai and Switzerland, at international prices.