Gold prices recorded a noticeable increase in local and global markets during Monday's trading. This surge was supported by rising demand for the yellow metal amidst the ongoing US government shutdown and escalating market bets on interest rate cuts by the US Federal Reserve (Fed), according to a report from "iSagha," a platform specializing in gold and jewelry trading.
Saeed Imbaby, the platform's Executive Director, stated that gold prices in the local market rose by about EGP 80 at the start of today's trading. The price of an ounce climbed by about $74, reaching $3,940, after hitting $3,960 as its highest level ever.
The price of a gram of 21-karat gold reached EGP 5,300.
24-karat recorded approximately EGP 6,057.
18-karat was about EGP 4,543.
14-karat reached approximately EGP 3,534.
The price of the Gold Pound (8 grams of 21-karat) settled at EGP 42,400.
Weekly Gains
Last week, gold achieved weekly gains totaling EGP 145. 21-karat opened trading at EGP 5,075 and closed at EGP 5,220. Globally, the ounce jumped by $126, rising from $3,760 to $3,886.
US Government Shutdown and Its Market Impact
This surge occurs amid continued uncertainty in the United States following the stalled negotiations between the White House and Congress to end the partial government shutdown. This prompted the US administration to warn of mass layoffs of federal employees if negotiations fail.
Imbaby noted that the persistence of the government shutdown reinforces the demand for gold as a safe haven, given the increasing concerns about its economic fallout.
Factors Supporting Gold's Ascent
Gold has risen by about 50% since the start of the year, supported by:
Strong purchasing by central banks.
Increased demand for Gold-Backed Exchange-Traded Funds (ETFs).
A weaker US dollar.
Interest from retail investors seeking hedging against trade and geopolitical tensions.
Analysts believe that gold's ascent is being driven by entities with a long-term view, such as central banks, rather than speculators. This reduces the likelihood of sharp corrections and enhances buying opportunities on any minor price dip.
Interest Rate Cut Expectations
CME FedWatch data indicates that markets are pricing in a 95% probability of a 25-basis point rate cut at the October meeting, and an 83% chance of a similar cut in December. This heavily supports the upward trend for the precious metal.
UBS Bank stated in a research note: "We see fundamental reasons driving gold for further gains, and we expect the ounce price to reach $4,200 by year-end."
Other Safe Havens
Silver rose by 1.5% to $49 per ounce, its highest level in over 14 years.
Platinum climbed by 0.5% to $1,614.
Palladium increased by 0.7% to $1,269.
Additional Geopolitical Repercussions
Globally, geopolitical risks increased following a new Russian attack on Ukraine involving more than 50 missiles and 500 drones. Meanwhile, US President Donald Trump urged the conflicting parties in Gaza to reach a quick peace agreement, warning of escalating violence. This, in turn, boosts the demand for gold as a safe haven.
Future Outlook
Gold continues to hit record levels amid investor optimism that the Federal Reserve will maintain its monetary easing policy. This is happening as US markets are impacted by the government shutdown and the postponement of important economic data releases.
Analysts believe that gold's trajectory remains bullish due to strong fundamental factors and continued positive momentum from central banks and strategic investors.
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