Domestic Gold Prices Lose EGP 160 in a Week Amid Global Market Turmoil

Domestic gold prices witnessed a 3.4% decline during last week's trading, coinciding with a 3.7% drop in global ounces. This comes as a result of escalating geopolitical tensions, rising oil prices, and the surge in both the US dollar and US Treasury yields, according to a report issued by the "Marsad Al Dahab" for Economic Studies.

The gold and jewelry researcher and director of the "Marsad Al Dahab" stated that the price of 21-karat gold dropped by about EGP 160 during the week, opening at EGP 7,005 and closing at EGP 6,845. Meanwhile, 24-karat gold recorded around EGP 7,823, 18-karat gold reached EGP 5,867, and the gold coin (Ginei) was recorded at EGP 54,760.

On the global front, the price per ounce dropped by about $175 within a single week, falling from $4,716 to $4,541, according to data from the World Gold Council.

Domestic gold prices had previously dropped by about EGP 25 during yesterday's (Saturday) trading, where 21-karat gold opened at EGP 6,870 and closed at EGP 6,845, coinciding with the global market's weekend closure.

Gold concluded the week on the global stock exchange at $4,541 per ounce. The precious metal remains about 19% below its all-time high of approximately $5,626 recorded on January 29, following highly volatile movements in recent days. This volatility comes amid rapid shifts in investor sentiment after the stalling of US-Iranian negotiations and mounting concerns regarding the Strait of Hormuz and energy prices.

Additionally, oil prices rose to levels near $109 per barrel, bringing inflationary pressures back to the forefront and prompting markets to reprice US interest rate expectations.

Higher US inflation and the continued rise in Treasury yields bolstered the strength of the greenback, exerting direct pressure on gold despite ongoing geopolitical tensions. While gold is traditionally viewed as a safe haven and a hedge against inflation, the current nature of inflation—driven by high oil prices—has redirected investors toward the US dollar and bonds instead of the precious metal.

US economic data further reinforced this trend, showing the Consumer Price Index (CPI) rising to 3.8%, alongside the Producer Price Index (PPI) recording its largest monthly gain since early 2022. This led markets to rule out interest rate cuts during 2026, with growing expectations of a potential rate hike before the year ends.

In a related context, the Central Bank of Russia announced that its gold and foreign exchange reserves rose by about $13.5 billion in a single week to reach $771 billion. This growth was supported by rising gold prices, improved energy revenues, and currency market movements, reflecting central banks' continued reliance on gold as a strategic asset within sovereign reserves.

For its part, Australia and New Zealand Banking Group (ANZ) lowered its gold price forecast for the end of 2026 to $5,600 per ounce from $5,800, while maintaining its positive long-term outlook, expecting gold to reach $6,000 by mid-2027. The bank explained that the markets will undergo three major phases starting with inflationary pressures and high interest rates, followed by a global economic slowdown due to the energy crisis, before central banks eventually pivot toward cutting rates again, which will restore strong support for gold.

The bank emphasized that ongoing geopolitical tensions and the growing trend of central banks diversifying reserves away from the dollar represent long-term structural support factors for gold, alongside the continued robust pace of central bank purchases of the precious metal.

In the same vein, Goldman Sachs suggested that central bank gold purchases will accelerate in the coming period, raising its estimate for average monthly demand to 60 tons during 2026. The bank noted that previous data understated the actual volume of gold demand since mid-2025, especially with undisclosed flows from London vaults to sovereign entities.

The bank also renewed its forecast for gold to reach $5,400 per ounce by the end of 2026, despite the likelihood of continued short-term pressures due to liquidity shortages and market volatility.

In India, the repercussions of the decision to raise gold and silver import duties to 15% have begun to affect market activity clearly, as the price gap widened between the Indian market and Gulf markets, particularly Dubai, where gold prices became about 12% lower compared to India.

This prompted many Indian families residing in the Gulf to expand their gold purchases from Dubai before traveling to India during the vacation and wedding season, capitalizing on customs regulations that allow carrying specific quantities of about 140 grams of gold duty-free.