Gold Extends Losses by EGP 75 as Prices Fall to Their Lowest Level in More Than Two Months

Marsad Al Dahab revealed that gold prices continued to decline in both local and international markets on Monday, reaching their lowest levels in more than two months. The decline was driven by growing expectations of a U.S. interest rate hike following stronger-than-expected employment data, while escalating geopolitical tensions in the Middle East pushed oil prices higher and renewed concerns about global inflationary pressures.

According to Marsad Al Dahab, the price of 21-karat gold fell by approximately EGP 75 compared with the close of last week’s trading, reaching around EGP 6,400 per gram. Meanwhile, gold prices on the international market declined by about $42, with the ounce trading at $4,286 at the time of writing, based on data from the World Gold Council.

The price of 24-karat gold reached EGP 7,314 per gram, while 18-karat gold traded at EGP 5,486 per gram. The gold sovereign (gold pound coin) recorded EGP 51,200.

Data compiled by the Marsad Al Dahab showed that local gold prices declined by around EGP 290 during the previous week. Twenty-one-karat gold opened trading at EGP 6,765 per gram and closed at EGP 6,475 per gram. Globally, gold lost approximately $212 per ounce, falling from $4,540 at the beginning of the week to $4,328 by the close.

The gap between local and international pricing narrowed to approximately EGP 133 per gram, reflecting improved balance between supply and demand in the Egyptian market, as well as the cautious pricing strategies adopted by traders following the sharp market fluctuations witnessed since the beginning of the year.

Demand for gold jewelry has shown signs of recovery after a period of weakness, while purchases of gold bars and gold coins have increased in recent days as lower prices attracted a new wave of buyers seeking savings and investment opportunities.

The return of demand despite the sharp correction in prices highlights gold’s continued role as a long-term store of value and a safe-haven asset, particularly amid ongoing uncertainty across global financial markets and the broader economy.

The latest downturn has reduced gold’s gains in the Egyptian market since the start of 2026 to approximately EGP 570 per gram, representing an increase of about 10% from the beginning of the year. Twenty-one-karat gold opened 2026 at EGP 5,830 per gram before reaching a record high near EGP 7,600 per gram in March.

Despite the recent correction, gold continues to retain a portion of its annual gains following a series of record-breaking rallies fueled by geopolitical tensions and strong central bank purchases worldwide.

On the international market, gold has recorded a year-to-date loss of approximately $32 per ounce, or 0.7%, after opening the year at $4,318 per ounce. Gold reached its all-time high of $5,626 per ounce on January 29.

Gold prices came under significant pressure after the release of stronger-than-expected U.S. employment data, which reinforced expectations that the Federal Reserve may maintain a restrictive monetary policy for a longer period and could even consider further rate increases if inflationary pressures persist.

Renewed military tensions in the Middle East have also pushed oil prices higher by more than $4 per barrel, reviving inflation concerns, particularly as energy costs remain one of the primary drivers of global price pressures.

Higher oil prices have led investors to reassess their expectations for monetary policy, increasing the likelihood that interest rates will remain elevated for longer. This environment tends to weigh on gold, which does not generate yield.

The U.S. economy posted strong job growth for a third consecutive month in May, underscoring the resilience of the labor market and providing the Federal Reserve with greater flexibility to keep interest rates elevated without significant concerns about economic slowdown.

Labor market data showed that the United States added approximately 172,000 jobs in May, significantly exceeding market expectations of 85,000 jobs. The unemployment rate remained unchanged at 4.3%, while annual wage growth slowed to 3.4% from 3.6% in the previous month.

Financial markets are increasingly pricing in the possibility of an additional U.S. interest rate increase before year-end, with the probability of further monetary tightening by December rising to around 72%, according to CME Group’s FedWatch Tool.

Beth Hammack, President of the Federal Reserve Bank of Cleveland, stated that the latest employment figures confirm the continued strength of the labor market and its proximity to full employment. She added that persistently elevated inflation may require further action by the Federal Reserve to contain price pressures.

On the geopolitical front, the conflict between Israel and Iran has entered a more dangerous phase, with both sides exchanging attacks across multiple fronts. Israel announced new strikes targeting military sites in western and central Iran, while Tehran launched additional ballistic missile attacks toward Israeli targets.

Regional tensions have also spread to other areas, with reports of military operations in southern Lebanon and northern Iraq, heightening concerns over a broader regional conflict and reducing prospects for a political settlement or ceasefire in the near term.

Although geopolitical tensions typically support demand for gold as a safe-haven asset, the strength of the U.S. dollar and rising U.S. Treasury yields have exerted a stronger influence in the current environment, prompting investors to favor yield-bearing assets over precious metals.

Markets are now focused on several key economic releases this week, particularly the U.S. Consumer Price Index (CPI) and Producer Price Index (PPI), scheduled for Wednesday and Thursday, respectively. These indicators are expected to have a significant impact on expectations for U.S. monetary policy and gold price movements.

Investors are also monitoring policy decisions from both the Bank of Canada and the European Central Bank amid heightened attention to the future direction of global interest rates during the second half of the year.

Meanwhile, central banks continue to provide long-term support for the gold market. Data from the People’s Bank of China showed that the country’s gold reserves increased for the nineteenth consecutive month in May.

According to the central bank, China added approximately 320,000 ounces of gold to its reserves during the month, extending the longest uninterrupted gold-buying streak since at least 2015.

Marsad Al Dahab emphasized that continued purchases by China and other central banks demonstrate gold’s enduring importance as a strategic reserve asset, providing long-term structural support for prices despite ongoing short-term volatility and market corrections.