Gold Declines Locally and Globally Amid Dollar Strength and U.S. Tariff Concerns

Gold prices fell in both local and global markets during Monday's trading, pressured by a strengthening U.S. dollar and growing anticipation ahead of new American tariffs scheduled to take effect this Wednesday.

Gold dropped by approximately EGP 25 in the local market compared to Saturday’s closing, with 21-karat gold falling to EGP 4,615 per gram, while the global ounce price declined by $34 to around $3,303.

The 24-karat gold gram recorded EGP 5,274, while 18-karat stood at EGP 3,956, and 14-karat at EGP 3,077. The price of a gold pound (8 grams of 21k) reached EGP 36,920.

This decline follows a week of gains in the local market, where gold rose by EGP 30 last week from EGP 4,610 to EGP 4,640 per gram. On the global front, gold rose from $3,274 to $3,337 per ounce during that same period.

The current retreat is driven by a stronger dollar index, alongside increasing market optimism over potential trade deals before the U.S. tariff deadline. U.S. bond yields have also risen following robust labor market data released late last week.

Persistently high interest rates in the U.S. are also exerting downward pressure on gold, which, as a non-yielding asset, becomes less attractive to investors in a tight monetary environment.

Trump's Tariff Threats Fuel Uncertainty, Offer Medium-Term Support for Gold

In this context, EmBaby noted that recent threats by U.S. President Donald Trump to impose an additional 10% tariff on countries aligning with the BRICS bloc could increase global economic uncertainty — a factor that could, paradoxically, support gold’s safe-haven appeal in the medium term.

On Sunday, speaking from Morristown Airport, Trump said that most trade agreements would be finalized or communicated by July 9, with new tariffs taking effect on August 1. He also posted on Truth Social:

"Any country aligning with the anti-American policies of BRICS will be charged an additional 10% tariff, without exception."

These remarks come as the BRICS summit takes place in Rio de Janeiro, where member states — Brazil, Russia, India, China, and South Africa — are advancing efforts to strengthen economic cooperation and reduce reliance on the U.S. dollar, a process known as “de-dollarization.”

Fed Minutes in Focus as Fears of Weakening Demand Mount

Meanwhile, investors are closely watching for the release of the Federal Reserve’s meeting minutes this Wednesday, which will shed light on the rationale behind the decision to maintain interest rates in June within the 4.25%–4.50% range. The minutes will also provide insights into the Fed’s outlook for the U.S. economy and future policy moves.

According to the World Gold Council’s June Gold Demand Trends report, global demand for the yellow metal remains solid, especially amid escalating geopolitical tensions between the U.S. and China.

However, Goldman Sachs has warned of additional downside risks to gold in the event of declining central bank purchases or if continued economic strength pushes the Fed toward further monetary tightening — both scenarios seen as unfavorable for gold prices.