Gold prices recorded a notable decline in the local Egyptian market on Saturday, coinciding with the weekend closure of global exchanges. This came after the international ounce dropped by 2.8% at the end of the trading week, weighed down by easing geopolitical tensions and improved global trade prospects.
According to the latest market data, gold prices in Egypt fell by EGP 25 per gram during Saturday’s trading compared to the previous day. The price of 21-karat gold settled at EGP 4,600 per gram, while the global ounce dropped by $95, closing the week at $3,274.
The 24-karat gram was priced at EGP 5,257, 18-karat at EGP 3,943, and 14-karat at EGP 3,067. The price of the gold pound stood at EGP 36,800.
On Friday, gold prices in the local market had already fallen by EGP 70 per gram, as 21-karat gold opened at EGP 4,695 and closed at EGP 4,625. Simultaneously, the international ounce slid by $60, from $3,334 to $3,274.
Risk Appetite Weighs on Gold
The decline occurred despite traditionally supportive factors for gold, such as a weaker US dollar and expectations of interest rate cuts. However, growing investor appetite for risk shifted capital toward high-yield assets, placing additional selling pressure on bullion.
The signing of a formal trade agreement between the United States and China, along with statements from US officials suggesting more deals may follow before July 9, helped boost market confidence. Notably, China announced its readiness to expedite shipments of rare earth minerals to Washington, reinforcing optimism around global trade relations.
Geopolitical Shifts Ease Safe-Haven Demand
On the geopolitical front, Iran signaled openness to diplomacy with the United States, while Al Arabiya reported that the Israel-Gaza conflict could end within two weeks — developments that reduced geopolitical risk premiums and weakened gold’s safe-haven appeal.
Despite a 1.32% drop in the US Dollar Index this week and stable US Treasury yields, gold failed to capitalize on these supportive signals. Analysts interpreted this as a sign of shifting market dynamics and waning traditional demand for safe-haven assets.
Equities Surge, Gold Falters
Saeed Embabi, Executive Director of the online gold and jewelry trading platform iSagha, noted that strong performances in global equity markets — particularly the Nasdaq Composite and S&P 500, both reaching all-time highs — reflect investor preference for growth assets over gold amid improved economic outlooks.
These developments are seen as part of a transitional phase, during which investors reassess asset roles amid ongoing monetary easing and receding geopolitical fears.
US Economic Data and Policy Outlook
US inflation data showed the core Personal Consumption Expenditures (PCE) index rose 2.7% year-over-year in May, exceeding expectations and complicating the Federal Reserve’s policy path. Minneapolis Fed President Neel Kashkari reaffirmed his forecast for two rate cuts in 2025, noting that the economic impact of trade conflicts might be less severe or more delayed than previously anticipated.
Meanwhile, in Washington, the Biden administration is facing growing challenges to pass a proposed tax cut and spending bill before the self-imposed July 4 deadline. The plan is estimated to add approximately $2.4 trillion to the national debt over the next decade.
Treasury Department data revealed that the federal deficit reached $316 billion in May alone, with interest payments on debt soaring to $92 billion — second only to Medicare and Social Security — raising fears of an impending debt crisis.
Political Pressure on the Fed
Market anxiety was further fueled by comments from former President Donald Trump, who criticized Fed Chair Jerome Powell as “terrible” and hinted at replacing him before his term ends in 2026. These remarks sparked renewed concerns about the Federal Reserve's independence, adding downward pressure on the dollar.
Despite short-term weakness in gold, analysts believe that renewed geopolitical tensions or inflationary setbacks could restore the metal’s safe-haven appeal. For now, the market remains in a state of cautious anticipation, awaiting clearer direction on global growth and monetary policy trends.
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