Gold at Record Highs as Ounce Approaches $3,800

Gold prices in both local and global markets saw a significant surge on Tuesday, climbing to unprecedented record levels. The rally was fueled by a weaker U.S. dollar and growing bets that the Federal Reserve will adopt a more accommodative monetary policy, against a backdrop of escalating geopolitical tensions worldwide, according to a report from the “iSagha” platform for gold and jewelry trading.

Price Movements Locally and Globally

Saeed Embabi, CEO of iSagha, said that gold prices in the local market rose by around 50 EGP during today’s session compared to the close of yesterday, with 21-karat gold reaching 5,100 EGP per gram. Globally, the ounce climbed by $42 to settle at $3,785, after touching a new all-time high of $3,791.

Embabi added that 24-karat gold recorded 5,829 EGP per gram, 18-karat stood at 4,371 EGP, while 14-karat reached 3,400 EGP. The gold pound coin stabilized at 40,800 EGP.

He noted that on Monday, gold had already gained about 80 EGP, with 21-karat opening at 4,970 EGP and closing at 5,050 EGP. At the global level, the ounce advanced from $3,685 to $3,748, an increase of $63.

Market Drivers

Investors are awaiting the release of the U.S. preliminary PMI index and a speech by Federal Reserve Chair Jerome Powell later today, events that could provide clearer signals on the path of U.S. interest rates.

Gold broke into new record territory, supported by strong expectations of further rate cuts and rising institutional demand. The CME FedWatch Tool shows that markets are pricing in two additional 25-basis-point cuts this year: one in October with a 90% probability and another in December with a 73% probability.

These expectations, combined with escalating geopolitical tensions between Russia and NATO and worsening conditions in the Middle East, have strongly reinforced gold’s role as a safe-haven asset.

Monetary Policy and Fed Statements

Last week, Federal Reserve Chair Jerome Powell stated that the latest rate cut was essentially a risk-management move, adding that the bank sees no need to rush into raising rates again despite persistent inflation risks.

By contrast, the newly appointed Fed governor Steven Miran called on Monday for aggressive monetary easing, warning that the central bank risks overtightening and harming the labor market. While some Fed officials opposed this stance, Miran’s comments strengthened speculation about further cuts, especially as inflation data has shown signs of easing.

Markets are now betting on a faster pace of monetary easing, with traders expecting short-term rates—currently in the 4.00% to 4.25% range—to drop below 3% by the end of 2026.

This divergence between Fed projections and market expectations has pushed the dollar lower from its highest level in more than a week, giving gold additional support.

Investment Flows

Holdings in the SPDR Gold Trust rose by 0.60% to 1,000.57 tonnes on Monday, the highest level in over three years, underscoring growing institutional appetite for the precious metal.

Meanwhile, demand in India also remained strong despite record local prices. Physical gold premiums there reached their highest level in 10 months ahead of the festive season, pointing to resilient consumer demand.

Geopolitical Landscape

Geopolitical tensions intensified as Russia and Ukraine traded accusations of drone strikes on civilian areas. NATO countries accused Moscow of violating the airspace of Estonia, Poland, and Romania—allegations Russia denied, blaming European powers for unfounded claims.

In the Middle East, the conflict escalated with increased cross-border attacks between Israel and Hamas, while Washington warned of the consequences of annexing the West Bank.