Gold Continues to Rise Locally and Globally Amid Escalating Trade Tensions and Growing Rate-Cut Bets

Gold prices recorded notable gains in both local and international markets on Thursday, driven by escalating trade tensions and renewed fears of a global economic slowdown. The rally is supported by a combination of interlinked factors, most notably a weakening U.S. dollar and mounting expectations that the Federal Reserve will cut interest rates at its upcoming meeting.

The price of 21-karat gold rose by EGP 15 to reach EGP 4,600 per gram, up from EGP 4,585 yesterday. Meanwhile, spot gold gained $7 globally, reaching $3,378 per ounce.

Other gold karats were priced as follows:

24-karat: EGP 5,257

18-karat: EGP 3,943

14-karat: EGP 3,067

Gold pound: EGP 36,800

Wednesday's trading session was relatively stable, with 21-karat gold opening and closing at EGP 4,585. Globally, gold declined slightly from $3,379 to $3,371 per ounce.

U.S. Tariffs Fuel Market Unrest and Boost Gold's Appeal

Gold continues to find support globally amid renewed demand for safe-haven assets, particularly after U.S. President Donald Trump’s punitive tariffs officially came into effect. These sweeping tariffs target dozens of countries with increases ranging between 10% and 50%, including a 100% tariff on imported semiconductors unless manufactured domestically.

This aggressive trade stance sparked global concerns over a new wave of economic protectionism, pressuring the U.S. dollar to its lowest level in a week and a half at 98.00 points, and enhancing gold’s attractiveness for non-dollar investors.

Rate-Cut Bets Push Gold Higher

According to the CME FedWatch Tool, markets are now pricing in a 93% probability that the Federal Reserve will cut interest rates by 25 basis points at its September meeting—up sharply from just 48% a week ago.

This shift is backed by remarks from several key Fed officials on Wednesday, including Neel Kashkari (President of the Minneapolis Fed), Mary Daly (San Francisco Fed), and Lisa Cook (Fed Governor), all of whom expressed support for monetary easing in light of weakening labor market data and economic indicators.

In an interview with CNBC, Kashkari stated:

“The economy is slowing, and it may be appropriate to begin adjusting interest rates soon… Two rate cuts this year remain a viable option.”

China Expands Gold Reserves for Ninth Consecutive Month

In related news, the People’s Bank of China confirmed it continued building its gold reserves in July, marking the ninth straight month of accumulation. Official data showed holdings rose to 73.96 million ounces, valued at $243.99 billion, up from 73.90 million ounces and $242.93 billion in June.

According to Bloomberg, China has maintained a long-term strategy of diversifying away from the U.S. dollar. Since November 2022, the country has added over 180 tonnes of gold to its official reserves—a move seen as a deliberate pivot toward hard assets amid intensifying geopolitical tensions.

Outlook: Could Gold Reach a New All-Time High?

Analysts at NAB bank expect the bullish momentum to persist through 2026, projecting an average gold price of $3,220 per ounce in 2025 and $3,475 in 2026. These expectations are supported by ongoing economic slowdown concerns and increasing global shifts toward monetary easing.