Gold prices recorded a notable increase in local markets and the global exchange during Wednesday’s trading. This rise was supported by growing expectations of interest rate cuts by the Federal Reserve, alongside increasing demand for safe-haven assets, according to a report by the "iSagha" platform.
Saeed Imbabi, the platform's CEO, stated that gold prices in the local market rose by approximately 55 EGP, bringing the price of a gram of 21-karat gold to the level of 6,155 EGP. Meanwhile, the price of an ounce in the global exchange jumped by about $66, recording $4,637.
He added that a gram of 24-karat gold reached approximately 7,040 EGP, and 18-karat gold recorded nearly 5,280 EGP, while the gold pound rose to about 49,280 EGP.
Global Markets On the global front, gold is trading near the $4,650 per ounce level amidst escalating expectations that the Federal Reserve will ease monetary policy, coupled with continued strong demand for the yellow metal as a safe haven. Gold, a non-yielding asset, benefits from declining inflation rates in the United States, which has bolstered market bets on interest rate cuts in the coming period.
Gold also received additional support from increasing geopolitical risks, prompting investors to increase their holdings of precious metals. The decline of the US Dollar Index, which measures the currency's performance against a basket of six major currencies, to around 99.10 points, contributed to enhancing the appeal of dollar-denominated gold, especially for investors holding other currencies.
Economic Data US inflation data for December showed a slowdown in core inflation. The Core Consumer Price Index (CPI), excluding food and energy, rose by only 0.2% on a monthly basis—below market expectations—while the annual rate stabilized at 2.6%, the lowest level in four years. Conversely, the headline CPI rose by 0.3% on a monthly basis, matching expectations, with the annual inflation rate settling at 2.7%.
Interest rate futures reflected a state of division among investors, with expectations ranging between two or three rate cuts during the current year. This exceeds the average projections of monetary policymakers, who suggest only one cut.
Geopolitical Context This coincided with escalating geopolitical concerns, particularly regarding political unrest in Iran, where the human rights organization "HRANA" reported the deaths of 2,571 people during protests. Additionally, US President Donald Trump called on Iranians to continue protests, pledging support, according to media reports.
In a related context, President Trump announced his intention to impose 25% tariffs on imports from countries that trade with Iran. This escalatory move aims to increase pressure on Tehran, with the President confirming that the decision would take effect immediately.
US Policy & Labor Market On the other hand, threats by US federal prosecutors to bring charges against Federal Reserve Chair Jerome Powell, regarding statements he made before Congress, have raised new questions about the independence of the Central Bank, at a time when political pressure to cut interest rates continues.
On the labor market front, US data showed the addition of 50,000 non-farm payrolls during December, falling short of market expectations. However, the unemployment rate declined to 4.4% compared to 4.6% in November, with average hourly wages rising to 3.8% on an annual basis.
Tom Barkin, President of the Federal Reserve Bank of Richmond, stated that the decline in unemployment is a positive indicator. He described job growth as moderate but stable, noting that hiring is currently concentrated in the healthcare and artificial intelligence sectors, amid continued uncertainty regarding the labor market's direction in the coming period.
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