Central Bank Purchases Drive Gold Above $4,300 Amid Market Volatility

Imad Saad, a gold market expert, stated that global gold markets have experienced significant volatility over the past few weeks. The precious metal maintained strong gains before settling in a sideways range above $4,300 per ounce, amid sharp fluctuations caused by U.S. economic data and Federal Reserve monetary policy expectations.

Saad emphasized that the major shifts in the gold market have not been driven solely by investor movements; central banks played the most prominent role. Global data and analyses indicate that central bank purchases of gold in November 2025 continued at a robust pace, supported by reserve diversification policies. China, in particular, added to its reserves for the thirteenth consecutive time, while official purchases in October reached around 53 tons. Financial institutions estimate that November purchases likely fell within a similar range of approximately 70–90 tons, confirming that official demand has become the primary driver of gold prices over the past three years.

He explained that this increase in official demand reflects countries’ efforts to diversify reserves and hedge against geopolitical risks and currency weakness, particularly the U.S. dollar. He also noted that the resumption of U.S. government spending heightened concerns over widening fiscal deficits, boosting demand for safe-haven assets and solidifying gold’s role in major investor portfolios during this period.

Central bank purchases add momentum to global demand and have contributed to rising gold prices in 2025, with expectations that official demand will continue into 2026, according to reports and surveys analyzing World Gold Council data. These forecasts align with analyses from international institutions, which indicate that gold will continue to benefit from strong official demand and hedging waves related to geopolitical risks, with some projected weakening in the dollar in the coming year.

Regarding the local market, Saad confirmed that gold prices in Egypt are directly affected by the global market and the stability of the U.S. dollar exchange rate. He noted rising demand for bullion due to recent price declines, which investors viewed as a buying opportunity.

This demand has prompted companies to extend delivery periods up to two weeks, due to changes in the trading mechanism between manufacturers and traders, where obtaining raw gold from traders first has become a prerequisite for producing jewelry.

Saad added that halting raw gold imports for companies has also contributed to this trend, highlighting the transformation of the Egyptian market from considering gold merely as a decorative commodity to a tool for investment and financial security, especially after the Financial Regulatory Authority allowed insurance companies to enable clients to invest directly in precious metals.

He pointed out that since March 2022, Egyptians have turned to gold as a hedge against declining savings and currency devaluation, noting that citizens have become more aware of global economic changes and rising inflation, prompting investment in the precious metal.

Saad also highlighted growth in sales of tourist-oriented jewelry with the opening of the new Egyptian Museum and the revival of the tourism sector, emphasizing that jewelry inspired by ancient Egyptian heritage or local designs represents key pillars of the domestic gold market and strengthens Egypt’s foreign currency earnings.