Gold prices rose in both local and global markets on Monday, driven by growing expectations of a U.S. Federal Reserve rate cut and mounting geopolitical tensions.
In Egypt, local gold prices climbed by about EGP 40 during the day compared with Saturday evening’s close. The 21-carat benchmark reached EGP 4,730 per gram, while spot gold gained $29 to trade at $3,476 per ounce.
24-carat: EGP 5,406
18-carat: EGP 4,054
14-carat: EGP 3,154
Gold pound coin: EGP 37,840
Gold also posted strong gains in August, advancing EGP 170 locally and $156 globally.
The yellow metal has held firm near record highs, supported by a combination of economic and geopolitical factors. Despite persistent inflationary pressures, markets appear almost certain that the Fed will cut interest rates this month. At the same time, concerns over the central bank’s independence are weighing on the U.S. dollar, further enhancing gold’s appeal as a non-yielding asset.
Additionally, geopolitical developments—from the ongoing Russia–Ukraine war to intensifying conflict between Israel and Hamas—continue to bolster gold’s safe-haven demand.
U.S. Monetary Policy
In his recent Jackson Hole address, Fed Chair Jerome Powell hinted at a potential shift toward a more accommodative stance, noting that “imbalances in economic risks may warrant an adjustment in policy.”
U.S. Commerce Department data showed the core Personal Consumption Expenditures (PCE) index rose 2.9% year-on-year in July, while personal spending grew 0.5%, beating forecasts.
These figures reinforce expectations of a September rate cut. According to the CME FedWatch tool, investors currently price in an 87% probability of a 25-basis-point cut, with at least two further cuts expected before year-end.
Jobs Data in Focus
Markets are now eyeing Friday’s closely watched Non-Farm Payrolls (NFP) report, which could determine the Fed’s next move. Bill Adams, Chief Economist at Comerica Bank, said that an increase of only 45,000 jobs alongside unemployment holding at 4.2% would strengthen the case for rate cuts.
Political Pressure on the Fed
Politically, President Donald Trump has stepped up pressure on the Federal Reserve by dismissing Governor Lisa Cook over alleged mortgage fraud. Cook has refused to resign and has taken the matter to court, fueling debate over the Fed’s independence. Her removal would allow Trump to appoint a replacement, giving him majority control of the Fed’s seven-member Board for the first time in decades.
Global Demand and Asia’s Role
A recent CME Group report revealed that China and India accounted for more than half of global consumer demand for gold in 2024, cementing Asia’s role as a key driver of the market, both in jewelry consumption and derivatives.
The report also noted gold rose 12% in 2023 and 29% in 2024, maintaining strong momentum into 2025 amid escalating trade disputes and political tensions.
Geopolitical Developments
On the global stage, Russia intensified its strikes on Ukraine last week, launching 598 drones and 31 missiles. Ukrainian President Volodymyr Zelensky vowed to respond with attacks deep inside Russia. Moscow reported Sunday that it had downed 112 Ukrainian drones within 24 hours.
In the Middle East, Israeli forces continued heavy air and ground bombardments of Gaza’s outskirts. Defense Minister Israel Katz confirmed the killing of Abu Ubaida, spokesman for Hamas’s military wing. Such developments have kept geopolitical risks high, providing further support for gold.
Economic Calendar – This Week
Monday: Labor Day holiday – U.S. markets closed
Tuesday: ISM Manufacturing PMI
Wednesday: JOLTS job openings data
Thursday: ADP employment report – jobless claims – ISM Services PMI
Friday: Non-Farm Payrolls (NFP)
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