Fed Chair’s Testimony and US Inflation Data to Determine Gold’s Next Direction as the Ounce Reclaims the $4,000 Level

Gold prices rose in both the Egyptian market and global exchanges during Tuesday’s trading as investors awaited two of the week’s most significant events: the release of US inflation data and Federal Reserve Chair Kevin Warsh’s testimony before Congress. Markets are looking for fresh signals on the future path of US monetary policy and interest rates.

The price of 21-karat gold increased by approximately EGP 35 from Monday’s close to around EGP 5,850 per gram, while spot gold gained about $21 to trade near $4,023 per ounce.

Twenty-four-karat gold was priced at approximately EGP 6,686 per gram, while 18-karat gold reached around EGP 5,014 per gram. The Egyptian gold pound traded at approximately EGP 46,800.

Local gold prices had declined during Monday’s session, with 21-karat gold opening at EGP 5,850 per gram and closing at EGP 5,815. Meanwhile, the global gold price fell to $4,002 per ounce before recovering during Tuesday’s trading.

The local gold premium rose to around EGP 135 per gram, reflecting continued demand for gold as a preferred savings and investment asset. The higher premium helped cushion the impact of the global decline on domestic prices.

At the same time, the US dollar strengthened against the Egyptian pound, surpassing EGP 50.71 at several Egyptian banks. The stronger exchange rate increased the local value of internationally priced gold when converted into Egyptian pounds, providing additional support to local gold prices despite cautious sentiment in global markets.

Attention is now focused on the release of the US Consumer Price Index (CPI), the Federal Reserve’s key inflation gauge, alongside Federal Reserve Chair Kevin Warsh’s testimony before the House Financial Services Committee.

Investors are expected to closely monitor any remarks regarding the central bank’s assessment of inflation and the future direction of monetary policy, particularly as expectations grow that interest rates could remain elevated for longer.

Global gold prices are attempting to stabilize after a sharp sell-off pushed the precious metal to its lowest level in nearly two weeks, pressured by a stronger US dollar and higher US Treasury yields.

Concerns that inflation could remain persistent enough to keep interest rates elevated have continued to weigh on investor sentiment.

Recent comments by Federal Reserve Governor Christopher Waller reinforced those concerns after he suggested that persistent inflationary pressures could require additional monetary tightening. His remarks prompted investors to reassess the outlook for US interest rates, supporting the dollar while reducing the appeal of gold, which does not generate interest income.

Market participants believe that both the inflation report and the Fed chair’s congressional testimony will play a decisive role in shaping price action over the coming days.

A stronger-than-expected inflation reading would likely strengthen the US dollar, push Treasury yields higher and increase pressure on gold prices. Conversely, softer inflation data or a less hawkish tone from the Federal Reserve could support further gains in the precious metal and help it extend its recovery above the $4,000 level.

This outlook is broadly consistent with the views of several major international financial institutions. HSBC, Bank of America and ING have all lowered their average gold price forecasts for 2026, citing persistent US dollar strength and expectations that interest rates will remain higher for longer.

Despite those downward revisions, the banks continue to maintain a constructive long-term outlook for gold, supported by sustained central-bank buying and ongoing geopolitical and economic uncertainty.

Meanwhile, the latest report from the World Gold Council highlighted mixed conditions in China, the world’s largest gold-consuming market, during the first half of 2026.

Gold ended the six-month period down about 8% in US dollar terms and 10% in Chinese yuan, reflecting weaker jewellery demand and the impact of tighter US monetary policy.

The report also noted that Chinese gold-backed exchange-traded funds recorded their second-largest first-half inflows on record, despite experiencing their largest monthly outflow ever in June as investors shifted part of their capital toward domestic equity markets.

Investment demand remained considerably more resilient than consumer demand.

The report further highlighted continued buying by the People’s Bank of China, which added 15 tonnes of gold to its reserves in June, bringing total purchases for the first half of the year to 40 tonnes.

The steady accumulation underscores the ongoing strategy of central banks to diversify their reserve assets and increase gold holdings despite weaker consumer demand.

Overall, the global gold market is currently being driven by two dominant forces: US monetary policy, through its impact on the US dollar and Treasury yields, and sustained central-bank purchases, which continue to provide long-term structural support for gold prices.

With investors closely watching both US inflation data and the Federal Reserve Chair’s testimony, the outcome of these events is expected to determine the next major direction for the gold market.