Gold Awaits Fed Rate Cut… Stability in Local Markets

Gold prices in the local market remained stable during Saturday’s trading, coinciding with the global market holiday. This came after the ounce closed the week with notable gains, supported by growing speculation that the U.S. Federal Reserve will cut interest rates at its upcoming September meeting.

Local Stability and Global Gains

The price of 21-carat gold stabilized at 4,580 EGP per gram, the same as Friday’s closing level.

24-carat gold recorded 5,246 EGP, while 18-carat stood at 3,934 EGP. The gold pound coin also remained steady at 36,720 EGP.

Globally, the ounce ended the week at $3,371, up by around $35, following a strong rally triggered by remarks from Jerome Powell, Chair of the Federal Reserve, at the Jackson Hole Symposium.

Powell’s Remarks… Key Market Signals

Powell stressed that economic forecasts, inflation risks, and slowing growth could necessitate changes in monetary policy, noting that the Fed is now about 100 basis points closer to neutrality compared to last year.

He explained that labor market stability provides the Fed with greater flexibility to move cautiously, while warning that the fragile balance between employment and inflation poses risks of job losses if pressures intensify.

He also pointed out that higher import tariffs are having a direct impact on prices, cautioning that if they persist, inflation risks may increase. However, he pledged not to allow a temporary price wave to turn into sustained inflation.

Market Bets

Markets currently estimate a nearly 90% probability that the Fed will cut interest rates by 25 basis points at its mid-September meeting. Powell’s comments reinforced these expectations, which immediately boosted gold to levels above $3,370 per ounce globally.

Outlook for Next Week

Global markets this week are awaiting key U.S. economic data, including durable goods orders, second-quarter GDP growth, and the Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge.

Expectations suggest that any higher-than-expected inflation readings would pressure gold, while weaker data could provide the metal with additional upward momentum.