Gold recorded significant gains in both local and global markets during August, driven by increased demand for safe-haven assets amid geopolitical and economic uncertainties, alongside anticipation of the Federal Reserve’s decisions on interest rate cuts next month.
Monthly and Weekly Gains
Gold prices in local markets rose by approximately 170 Egyptian pounds. The price of a gram of 21-karat gold opened August at 4,520 pounds and closed at 4,690 pounds. Meanwhile, the price of an ounce of gold increased by about $156, opening the month at $3,291 and closing at $3,447.
Last week, gold prices in local markets rose by around 105 pounds, with 21-karat gold starting the week at 4,585 pounds and closing at 4,690 pounds. The ounce of gold gained approximately $76, opening at $3,371 and closing at $3,447.
The price of 24-karat gold reached 5,360 pounds, 18-karat gold hit 4,020 pounds, and 14-karat gold recorded about 3,127 pounds, while the price of a gold pound stabilized at 37,520 pounds.
Drivers of the Surge
The recent rise can be attributed to several factors, including escalating global geopolitical and economic risks, strong expectations of a U.S. interest rate cut in September, increased demand from central banks for hedging and reducing reliance on the dollar, and concerns about the Federal Reserve’s independence, which have boosted investor interest in gold.
As a result, any short-term price dips are considered good buying opportunities.
U.S. Monetary Policy
In his recent speech at the Jackson Hole Symposium, Federal Reserve Chairman Jerome Powell hinted at the possibility of shifting toward a more accommodative policy, noting that “imbalances in economic risks may warrant adjustments to monetary policy.”
Data from the U.S. Department of Commerce showed that the core Personal Consumption Expenditures (PCE) index rose by 2.9% year-on-year in July, while personal spending grew by 0.5%, exceeding expectations, further supporting bets on an interest rate cut next month.
Anticipation of Jobs Data
Markets are focused on the upcoming Non-Farm Payrolls (NFP) report due on Friday, which is expected to be a key determinant of gold prices and interest rate expectations. According to Bill Adams, chief economist at Comerica Bank, adding only 45,000 jobs while unemployment remains at 4.2% would bolster the likelihood of a rate cut.
Politics and Gold
On the political front, U.S. President Donald Trump continues to pressure the Federal Reserve, pushing to remove Governor Lisa Cook from the Board of Governors, sparking debates about the central bank’s independence. Additionally, escalating geopolitical tensions following stalled negotiations between Washington and Moscow over Ukraine further solidify gold’s status as a safe-haven asset.
Interest Rate Expectations and Asian Demand
Federal Reserve Governor Christopher Waller stated that he supports a 25-basis-point rate cut in September, with the possibility of additional cuts ranging between 125 and 150 basis points in the coming months.
Meanwhile, a recent CME Group report indicated that China and India accounted for more than half of global consumer demand for gold in 2024, reinforcing Asia’s role as a key driver of global demand, both in consumption and derivatives.
The report highlighted that gold rose by 12% in 2023, 29% in 2024, and has continued its strong performance in 2025 amid concerns over trade tariffs and rising global political tensions.
-Upcoming Economic Calendar (Next Week)
-Monday: Labor Day holiday – U.S. markets closed
-Tuesday: ISM Manufacturing PMI
- Wednesday: JOLTS Job Openings data
- Thursday: ADP Employment Report, Unemployment Claims, ISM Services PMI
- Friday: Non-Farm Payrolls (NFP) report
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