Gold Continues to Hit Record Highs Amid Uncertainty

Gold prices rose in local and global markets during Tuesday's trading, supported by increased investment demand amid a state of global geopolitical and economic uncertainty, alongside strong expectations for a cut in US interest rates in the coming months. This is according to a report issued by the platform "iSagha," which specializes in gold and jewelry trading.

Saeed Imbaby, the platform's Executive Director, stated that gold prices in the local market increased by approximately 25 Egyptian Pounds (EGP) during today's trading compared to the end of yesterday's trading. As a result, the price of a gram of 21-karat gold reached EGP 5,325. Simultaneously, the global ounce price rose by about $21 to reach $3,981, its highest level in history.

Imbaby added that 24-karat gold recorded about EGP 6,086, 18-karat reached EGP 4,564, and 14-karat was around EGP 3,550. The price of the Gold Pound (Gineh Gold) remained stable at EGP 42,600.

The report indicated that local gold prices had risen by about EGP 80 yesterday, Monday. 21-karat opened trading at EGP 5,220 and closed at EGP 5,300. The global ounce also climbed by about $74, from $3,886 to $3,960.

Global Drivers of the Surge

In global markets, gold prices continued to post strong gains, touching $3,977 at the start of today's trading as a new record high. This was driven by strong investment demand amid geopolitical and economic uncertainty, with additional support from expectations of US interest rate cuts.

The platform explained that gold has maintained its upward trend since the beginning of the week, approaching the $4,000 per ounce barrier. This is supported by multiple factors, most notably the ongoing US government shutdown and increasing investor bets on further rate cuts by the US Federal Reserve (Fed).

Some media reports attribute this rise to the US government shutdown, which entered its second week. They argue that although it might negatively affect short-term US economic growth, it supports gold as a safe haven amidst financial and political ambiguity.

However, other reports suggest that the government shutdown is not the sole factor behind the ascent, as expectations for rate cuts have not significantly changed in recent days. This implies that the main momentum for gold comes from deeper factors related to political risks and weak confidence in traditional assets.

Expert and Bank Opinions and Forecasts

In this context, Thu Lan Nguyen, Head of FX and Commodity Research at Commerzbank, stated that political and financial risks have become an increasing source of uncertainty. She predicted that the gold price will reach $4,000 by the end of the current year, supported by expectations of US interest rate cuts during the next two Fed meetings.

Nguyen added: "We believe the gold price is still well supported at the moment, and we anticipate further increases with significant rate cuts being implemented. Therefore, we are raising our forecasts to $4,000 per ounce by the end of the current year and $4,200 per ounce in 2026, up from previous estimates of $3,600 and $3,800."

Media data also confirmed that the recent resignations of the Prime Ministers in France and Japan contributed to a rise in risk premiums on government bonds and raised doubts about their governments' ability to implement disciplined fiscal policies, which increased demand for gold as an alternative refuge. Furthermore, financial risks also increased in the US and the UK, making government bonds less attractive and boosting gold's status as a relatively safe option.

For his part, Ole Hansen, Head of Commodity Strategy at Saxo Bank, said that the strong demand for Gold-Backed Exchange Traded Funds (ETFs) is one of the main price support factors, driven by the "Fear of Missing Out" (FOMO) and a decline in confidence in traditional havens like government bonds. He added that continued central bank purchases and lower financing costs reinforce gold's upward momentum.

Impact of US Policies and Economic Indicators

In the United States, the White House downplayed President Donald Trump's statements about the government shutdown's impact on the job market but warned of potential federal employee furloughs if the crisis continues. The ongoing disruption of government institutions has delayed the release of official economic indicators, prompting investors to rely on non-governmental data to estimate the timing and size of expected rate cuts.

Markets are still pricing in a 97% probability of a 25 basis point rate cut at the October meeting and an 88% probability of a similar cut in December, according to the CME FedWatch Tool.

Gold has risen by 51% so far this year, supported by major purchases by central banks, increased demand from index funds, a weaker US Dollar, and growing interest from individual investors to hedge against inflation and geopolitical tensions.

Yesterday, Goldman Sachs raised its gold price forecast for December 2026 from $4,300 to $4,900 per ounce, based on expectations of continued strong institutional demand.

Data from the People's Bank of China also showed that the bank continued to add gold to its reserves for the eleventh consecutive month in September, bringing the total to 74.06 million ounces. This reflects the continuation of major central banks in diversifying their reserves away from the dollar.

Analysts believe that the US government shutdown, along with global political tensions and declining confidence in government bonds as a traditional haven, represents a perfect storm pushing gold prices toward new peaks. They expect the price to exceed $4,000 per ounce in the coming months if these factors persist.