Gold prices retreated in the local market during Thursday’s trading session, in line with declines in global markets, pressured by a stronger U.S. dollar after solid American employment data reduced expectations of an imminent interest rate cut by the Federal Reserve, according to a report issued by the iSagha platform.
Eng. Saeed Embaby, CEO of iSagha, said that 21-karat gold fell by around EGP 10 to record EGP 6,775 per gram. Globally, gold dropped by approximately $20, with the ounce تداولing near $5,063.
He added that 24-karat gold recorded EGP 7,743 per gram, while 18-karat gold reached EGP 5,807 per gram. The gold pound coin stood at approximately EGP 54,200.
Interest Rates and Liquidity Flows
Embaby explained that lower interest rates in the local market tend to redirect liquidity from fixed-income instruments toward value-preserving assets, foremost among them gold. Historically, declining real yields have increased the appeal of the yellow metal as a safe haven, particularly in a more accommodative monetary environment.
He stressed that understanding the interest rate cycle is key to interpreting gold’s movements, noting that current developments continue to support this trend.
Egypt’s Monetary Policy Committee is scheduled to meet Thursday to decide on interest rates, after the Central Bank of Egypt cut rates by a total of 7.25% throughout 2025 across five meetings, bringing deposit rates to 20% and lending rates to 21%.
The meeting comes as annual urban inflation in Egypt slowed to 11.9% in January, down from 12.3% in December, according to data from the Central Agency for Public Mobilization and Statistics (CAPMAS).
U.S. Labor Data Pressures Gold
Globally, the U.S. nonfarm payrolls report dampened market bets on faster monetary easing. The data showed that the U.S. economy added 130,000 jobs in January, up from a revised 48,000 in December and well above expectations of 70,000.
The unemployment rate edged down to 4.3% from 4.4%, while average hourly earnings rose 3.7% year-on-year, slightly exceeding forecasts.
Following the release, traders raised the probability that the Federal Reserve will keep interest rates unchanged in March to nearly 95%, up from 80% a day earlier, according to the CME FedWatch Tool.
Beth Hammack, President of the Federal Reserve Bank of Cleveland, said the labor market appears to be in healthy balance and emphasized the importance of returning inflation to the 2% target, noting that monetary policy is close to neutral.
Meanwhile, Jeffrey Schmid, President of the Federal Reserve Bank of Kansas City, warned that premature rate cuts could prolong elevated inflation, underscoring the need to maintain restrictive policy for longer.
Dollar Outlook and Geopolitical Factors
The U.S. dollar attempted to extend its gains after rebounding from a two-week low, supported by strong employment data, despite ongoing expectations for two 25-basis-point rate cuts this year, with the first potentially coming in July.
At the same time, geopolitical tensions—particularly surrounding Iran—continue to provide underlying support for gold as a safe-haven asset. President Donald Trump, during a meeting with Israeli Prime Minister Benjamin Netanyahu, stressed the need to continue negotiations with Iran, warning of possible action should a nuclear agreement fail to materialize.
Focus on Inflation Data
Markets are now awaiting the upcoming U.S. Consumer Price Index (CPI) data due Friday, which could offer further guidance on the Federal Reserve’s policy path. Forecasts suggest that both headline and core inflation will rise by 2.5% year-on-year in January.
Investors will also monitor weekly initial jobless claims for additional short-term signals on labor market conditions.
A softer inflation reading could revive expectations of rate cuts and provide support for gold, while persistently elevated inflation may strengthen the dollar and weigh on non-yielding assets, including the precious metal.
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