Gold Declines Globally and Locally Amid Fed Appointment Speculations and Rising U.S. Yields

Gold prices recorded a notable decline in Wednesday’s trading session, pressured by rising U.S. Treasury yields and market anticipation over upcoming announcements by U.S. President Donald Trump regarding Federal Reserve appointments. These developments unfold amid persistent geopolitical tensions and growing expectations of an imminent interest rate cut.

In the local Egyptian market, the price of 21-karat gold dropped by EGP 5, reaching EGP 4,580 per gram compared to yesterday’s close. Meanwhile, global spot gold declined by $13 to settle at $3,366 per ounce.

Other local prices included:

24-karat gold at EGP 5,234

18-karat gold at EGP 3,926

14-karat gold at EGP 3,054

The gold pound held steady at EGP 36,640

Yesterday, Tuesday, also saw a EGP 5 drop in 21-karat gold prices, falling from EGP 4,590 to EGP 4,585 per gram, despite a slight uptick in global gold prices from $3,376 to $3,379 per ounce.

Shift to Risk Assets Dampens Gold's Momentum

Gold’s global retreat came after a four-day winning streak, driven by renewed appetite for risk as Asian equities rebounded. The move came in tandem with a recovery in 10-year U.S. Treasury yields, which reduced the appeal of non-yielding assets like gold.

Investor attention is now firmly focused on the White House, as Trump is expected to soon announce his nominee for the Federal Reserve Board. The president confirmed that the shortlist to replace current Fed Chair Jerome Powell has been narrowed down to four candidates.

In an interview with CNBC, Trump revealed that two candidates are from the "Kevin" camp—referring to former economic advisor Kevin Hassett and former Fed governor Kevin Warsh.

Rate Cut Expectations Rise Amid Weak U.S. Data

According to the CME FedWatch tool, markets are pricing in an 86% chance that the Fed will cut interest rates during its September meeting. This outlook is supported by soft economic indicators, including a drop in the ISM Services PMI to 50.1 and a decline in the employment component to 46.4, signaling labor market weakness.

These figures followed a disappointing non-farm payroll report and Trump’s unexpected decision to fire the head of the Bureau of Labor Statistics—moves that have strengthened market conviction that a rate cut is imminent.

Futures markets now show a 70% probability of a 25 basis-point rate cut in September, with expectations for at least two additional cuts before year-end.

Trade Tensions and Safe-Haven Demand

Trump also reignited trade tensions by threatening to impose new tariffs on India for continuing to import Russian oil. While markets haven’t reacted with panic, such geopolitical frictions continue to support long-term demand for safe-haven assets like gold.

Gold remains a traditional store of value during periods of political and economic uncertainty, and such global developments tend to reinforce its strategic role in diversified portfolios.

Key Market Indicators in Focus

This week, investors are watching several critical economic events, including:

A 10-year U.S. Treasury auction

The Bank of England’s interest rate decision

U.S. weekly jobless claims data on Thursday

Speeches from several Federal Open Market Committee (FOMC) members

Global Sales Dip, Egypt’s Gold Reserves Climb

In parallel, data from Australia’s Perth Mint showed that gold product sales fell by 33% in July compared to the previous month, while silver sales declined to a six-month low.

Locally, the Central Bank of Egypt reported an increase in gold reserves by approximately 1,768 ounces in July, bringing the total to 128.6 metric tons—an annual rise of nearly 1.7 tons (around 55,000 ounces).

The dollar value of Egypt’s gold reserves also rose to $13.639 billion in July, up from $13.586 billion in June—reflecting both additional gold purchases and the impact of higher global prices.

Central Banks Maintain Steady Gold Buying

According to the latest World Gold Council report, central banks continued to purchase gold at a steady pace in June, with net purchases totaling 22 metric tons—marking the third consecutive monthly increase.

Total central bank purchases in the first half of 2025 reached 123 metric tons, slightly below the same period in 2024 but still consistent with the long-term upward trend in official sector gold demand.