Gold Declines Locally and Globally Under Dollar Pressure and Reduced U.S. Rate-Cut Bets

Gold prices fell in both the domestic market and global exchanges during Monday’s trading, pressured by a stronger U.S. dollar and easing expectations of interest rate cuts by the Federal Reserve, according to a report issued by the iSagha platform.

Saeed Embabi, CEO of iSagha, said the price of 21-karat gold dropped by about EGP 60 to EGP 6,640 per gram, while the global ounce declined by around $47 to $4,996.

Meanwhile, 24-karat gold recorded EGP 7,589 per gram, 18-karat stood at EGP 5,691, and the gold pound reached approximately EGP 53,120. Prices had ended last week down by EGP 35 locally, alongside global losses of $78 per ounce.

Globally, gold hovered near the $5,000 per ounce level after rising more than 2% in the previous session, supported by U.S. inflation data that came in weaker than expected.

However, the start of the week was marked by caution and volatility amid mixed macroeconomic indicators and traders’ reluctance to push prices into a new upward wave.

The U.S. Consumer Price Index (CPI) reading came in below expectations, with the headline index rising 0.2% month-on-month in January compared to 0.3% in December, while annual inflation slowed to 2.4% from 2.7%.

In contrast, labor market data showed relative strength, with 130,000 nonfarm jobs added—well above December’s revised figure of 48,000—while the unemployment rate fell to 4.3% from 4.4%.

These figures reflect a balanced improvement in both inflation and labor market trends, aligning with the Federal Reserve’s dual mandate. This has led traders to reinforce bets on interest rate cuts exceeding 50 basis points this year, with futures markets pricing in a first cut as early as June.

Although easing inflation supports gold through expectations of monetary easing, the stronger dollar has capped gains in the precious metal. Gold continues to draw underlying support from expectations of rate cuts in the second half of the year, given its status as a non-yielding asset.

On the geopolitical front, ongoing tensions continue to provide relative support for safe-haven demand, particularly amid developments in U.S.-Iran relations. The BBC reported that Tehran has shown willingness to consider concessions in pursuit of a nuclear agreement, provided Washington is open to discussing sanctions relief.

Iranian Foreign Minister Abbas Araghchi also arrived in Geneva to attend a new round of nuclear talks.

Meanwhile, reports that the United States deployed the aircraft carrier USS Gerald R. Ford to the Middle East heightened market caution amid stalled negotiations, keeping geopolitical risks embedded in gold pricing.

In the short term, the yellow metal is likely to remain within a limited trading range, particularly amid lower liquidity due to the U.S. Presidents’ Day holiday, which could prolong volatility.

Markets this week are focused on the minutes of the Federal Open Market Committee’s January meeting, as well as personal income and spending data that will include the core Personal Consumption Expenditures (PCE) index—the Fed’s preferred inflation gauge—alongside the preliminary estimate of fourth-quarter GDP, in search of clearer signals on the timing of the anticipated rate cut.

Investors are also monitoring the potential inflationary impact of U.S. President Donald Trump’s threats to impose new tariffs, as well as the broader trajectory of U.S. monetary policy, both seen as key factors in determining gold’s direction in the coming period.