Gold prices in local markets rose by 0.7% over the week ending Saturday evening, while the global ounce price increased by 1%, driven by continued demand for safe assets amid geopolitical tensions and expectations of global monetary easing, as central banks look to reduce interest rates.
Engineer Said Embabi, CEO of the online gold and jewelry trading platform iSagha, reported that local gold prices increased by 25 EGP over the past week. The price of a gram of 21-karat gold started the week at 3,710 EGP, reached 3,755 EGP, and closed at 3,735 EGP, while global gold prices rose by 26 USD. The ounce opened the week at 2,721 USD, reached a record high of 2,758 USD, and closed at 2,747 USD.
Embabi added that the price of 24-karat gold reached 4,269 EGP per gram, 18-karat gold at 3,201 EGP per gram, 14-karat at 2,490 EGP per gram, and a gold pound at 29,880 EGP.
Local gold prices dropped by 7 EGP on Saturday, opening at 3,742 EGP per gram for 21-karat gold and closing at 3,735 EGP, coinciding with the weekend break for the global markets.
According to iSagha data, local gold prices have increased by 17.6% or about 560 EGP since the beginning of 2024, while global prices have risen by about 685 USD, or 33.2%, driven by central bank purchases, expectations of ending the cycle of monetary tightening, increased demand for safe assets due to geopolitical conflicts in the Middle East, and growing individual purchases for savings and protection purposes.
Embabi clarified that local gold prices are trading approximately 37 EGP below global prices, attributed to the rise in export activity.
He added that the Central Bank’s decision to extend the deadline for repatriating export revenues from gold sales to 180 days has boosted exports, especially as demand has calmed. This has reduced local price pressures, as raw gold traders opt to price below global rates to secure profit margins.
Embabi also noted that sales activity is currently stable, as the exchange rate of the dollar remains steady, demand is calm, and the high buying wave has subsided with the depletion of citizens’ cash.
He mentioned that discussions of a real estate bubble have driven citizens back to gold, bolstering sales after the market experienced a relative slump over the summer and at the start of the school year.
Embabi pointed out that the rise in global gold prices is due to sustained demand amid geopolitical tensions and concerns about the U.S. elections. Central banks worldwide are expected to hasten their rate cuts more aggressively.
He added that global gold prices declined midweek after the ounce hit a historic high of 2,758 USD, driven by a stronger dollar, rising U.S. Treasury yields, and profit-taking pressures.
Data from the United States on Thursday showed private sector business activity continued to grow at a healthy pace in early October, with the preliminary Global Purchasing Managers Index rising to 54.3 in October from 54.0 in September.
In a related context, markets are awaiting the first estimate of U.S. annual GDP growth for the third quarter on Wednesday, the Personal Consumption Expenditures Price Index on Thursday (the Fed's preferred inflation gauge), and U.S. labor market data for October on Friday.
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