Gold prices in local markets and the global exchange rose during Monday’s trading, hitting their highest levels in six weeks. This surge was driven by growing bets that the Federal Reserve will cut interest rates at its upcoming meeting this month, according to a report by the "iSagha" gold and jewelry trading platform.
Local Price Movement
Saied Embabi, CEO of iSagha, stated that local gold prices rose by approximately 25 EGP during today’s trading. The price of 21-karat gold recorded 5,675 EGP per gram, while the global ounce price rose by about $37 to reach $4,253.
Other karat prices recorded the following:
24-karat: Approximately 6,486 EGP.
18-karat: Approximately 4,864 EGP.
Gold Pound:Stabilized at 45,400 EGP.
November Performance Review
During November, local gold prices achieved gains of 5.6% (an increase of 300 EGP), as 21-karat gold opened the month at 5,350 EGP and closed at 5,650 EGP.
Globally, the ounce rose by 5.3% (gaining $213), moving from $4,003 at the opening to $4,216 at the close.
Prices also recorded a local rise of about 200 EGP during the last week of November alone, while the global ounce gained $151 during the same period.
Market Drivers
According to the report, the rise in gold was supported by increasing expectations of a US interest rate cut following cautious statements by several Federal Reserve officials. This pressured the dollar, pushing it to a two-week low, which boosted demand for the non-yielding yellow metal.
The report emphasized that market caution, alongside escalating geopolitical tensions related to the Russia-Ukraine war, served as an additional factor supporting gold as a safe haven. However, some purchasing power remains hesitant while awaiting important US economic data this week, starting with the ISM Manufacturing Index.
Key Influences and Statements
Fed Officials:The report noted that statements by Federal Reserve Governor Christopher Waller and New York Fed President John Williams reinforced expectations of a rate cut soon. Additionally, mixed US data released last week did not negatively impact investor appetite for gold.
US Administration: In a related context, White House Economic Advisor Kevin Hassett stated he would be happy to assume the role of Federal Reserve Chair if selected by President Donald Trump. This sentiment increased the likelihood of further rate cuts in the coming phase, helping push gold to its six-week highs today.
Global & Geopolitical Context
China: A private survey showed China's manufacturing activity slipping into contraction territory, following the official PMI's contraction for the eighth consecutive month. This weighed on market sentiment amidst rising geopolitical risks.
Russia-Ukraine: The Black Sea witnessed additional tension after two oil tankers belonging to the Russian fleet were attacked by Ukrainian drones. Meanwhile, US Secretary of State Marco Rubio indicated that recent talks with Ukrainian officials were "very productive," despite the continued need for further efforts to end the war.
Traders are awaiting a set of key US data releases this week, including manufacturing and services PMIs, industrial production, jobs data, and unemployment claims. These figures are expected to help shape the direction of gold against the dollar in the coming period.
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