Gold Continues Fifth-Day Rally Supported by Dollar Decline After End of U.S. Government Shutdown

Gold prices rose in both local and international markets on Thursday, marking their fifth consecutive day of gains, supported by a weaker U.S. dollar following the end of the government shutdown, according to a report from the “Ai Sagha” platform for gold and jewelry trading.

Saeed Embabi, the platform’s CEO, stated that domestic gold prices increased by about EGP 50 during Thursday’s trading, with the 21-karat gold gram reaching EGP 5,645, while the international ounce rose by approximately $44 to $2,440. He added that 24-karat gold reached EGP 6,451, 18-karat gold EGP 4,839, and the gold pound remained at EGP 45,160.

The report noted that gold prices had climbed about EGP 80 on Wednesday, with the 21-karat gram opening at EGP 5,515 and closing at EGP 5,595, while the international ounce rose from $4,130 to $4,196.

On Thursday, gold recorded its highest level in three weeks, surpassing $4,200 per ounce, as the U.S. dollar weakened amid reduced risk appetite following the government shutdown. Investors appear convinced that delayed U.S. macroeconomic data may reveal some economic weakness during the prolonged shutdown, potentially prompting the Federal Reserve to further cut borrowing costs in December.

Earlier on Thursday, U.S. President Donald Trump signed a bill ending the longest government shutdown in U.S. history, which was widely welcomed by the market. The rise in gold prices contributed to a weaker U.S. dollar, the safe-haven currency, against major currencies, further strengthening gold.

Investors seem unfazed by optimism stemming from the U.S. government reopening, which still supports risk appetite and could undermine gold as a safe haven. Gold bulls remain persistent, supported by cautious Federal Reserve expectations that continue to pressure the U.S. dollar.

The government reopening has refocused markets on deteriorating financial expectations and concerns over weak economic momentum. Economists estimate that the prolonged shutdown may have already reduced quarterly GDP growth by 1.5%–2%, keeping dollar bulls on the defensive.

Data from workforce analytics firm Revelio Labs last week showed a loss of 9,100 jobs in October, with government jobs declining by 22,200. The Federal Reserve Bank of Chicago also estimated a slight rise in the unemployment rate last month, signaling further labor market weakness.

Investors continue to favor a more dovish Federal Reserve, pricing in roughly a 60% probability of an additional 25-basis-point rate cut at the Federal Open Market Committee meeting in December.

Raphael Bostic, President of the Federal Reserve Bank of Atlanta, stated on Wednesday that current indicators suggest a balanced labor market and he does not expect a sharp slowdown in the near term. He added: “I don’t see much indicating price pressures, and monetary policy easing risks fueling inflation.”

Traders are closely analyzing speeches by FOMC members for further guidance on future rate cuts, as expectations will play a key role in driving demand for the U.S. dollar.

Locally, the Egyptian Financial Regulatory Authority (FRA) issued a new regulatory framework—the first of its kind—allowing life insurance companies and capital accumulation programs to enable clients to invest directly in precious metals, primarily gold, under safe and transparent guidelines.

Embabi described the decision as a significant step toward integrating gold into the formal investment system, opening the door for major financial institutions to enter the precious metals market. He expects it to stimulate structured domestic demand and enhance insurance company returns within a regulatory framework that ensures transparency and client protection.

He explained that if insurance companies begin institutional gold purchases for long-term investment, this could increase actual demand against an almost fixed supply, particularly in the import-dependent local market. However, he added that these investments are expected to be managed gradually and systematically, reducing the likelihood of severe supply shortages or unjustified price spikes.

In conclusion, the decision may boost demand rather than supply, but it is unlikely to create a market crisis as long as execution remains under oversight and within controlled limits.