Gold Declines Due To US-China Trade Truce ,Slowing Inflation

Gold prices declined in local markets during mid-day trading on Wednesday, due to a decline in ounces on the global stock exchange, as a result of weak demand following the US-China trade truce and slowing US inflation rates.

Gold prices declined in local markets by about EGP 65 compared to the close of trading yesterday, with the price of 21-karat gold reaching EGP 4,575 per gram, while the price of an ounce fell by $59 to $3,191.

The price of 24-karat gold reached EGP 5,229 per gram, the price of 18-karat gold reached EGP 3,921 per gram, and the price of 14-karat gold reached EGP 3,050 per gram, while the price of the gold pound reached EGP 36,600 per gram. Gold prices in local markets fell by EGP 35 during trading on Tuesday, with the 21-karat gold gram opening at EGP 4,605 ​​and closing at EGP 4,640. Meanwhile, the ounce rose by $12, opening at $3,238 and closing at $3,250.

Gold prices in local markets declined due to the decline in ounces on the global stock exchange and the decline in the dollar exchange rate, especially with the continued decline in demand.

He added that gold was subject to heavy selling in global markets due to the easing of economic tensions between the United States and China and the release of US inflation data.

Gold prices declined following a temporary easing of trade tensions between the United States and China. The two countries agreed to suspend mutual tariffs for 90 days during talks in Geneva. The White House also announced a reduction in the minimum threshold for low-value shipments from China. This improvement led to a rise in global stock markets, reducing the need for traditional safe-haven investments such as gold and silver. Economic data revealed a decline in US inflation rates for April, pushing markets toward riskier assets and alleviating concerns about a sharp monetary tightening. Investors now expect the Federal Reserve to cut interest rates by about 53 basis points starting in September.

Deutsche Bank issued a report stating that easing trade restrictions on China will not lead to a rapid rate cut by the Federal Reserve.

Citibank lowered its three-month gold price target from $3,500 to $3,150, citing reduced geopolitical risks and the potential for short-term stability between $3,000 and $3,300. The bank expects continued demand for exchange-traded funds (ETFs) driven by rising savings, but also pointed to downward pressure from weak demand for jewelry and increased supply.

In a related development, markets are awaiting the release of US Producer Price Index (PPI) and US retail sales data. US weekly unemployment claims, Empire State Manufacturing Survey, Philadelphia Manufacturing Survey, and Federal Reserve Chairman Jerome Powell's remarks in Washington, D.C., will be released on Thursday, and the University of Michigan's preliminary consumer confidence survey will be released on Friday.