Gold Falls EGP 45 Locally as Domestic Prices Remain EGP 106 Above Global Levels

Gold prices declined in both the local market and global exchanges on Monday, pressured by a stronger U.S. dollar and rising oil prices, while investors closely monitored developments in ongoing negotiations between the United States and Iran, as well as key U.S. economic data that could shape the future path of monetary policy, according to a report issued by the Marsad Al Dahab for Economic Studies.

The report noted that local gold prices fell by EGP 45 compared with last week's close, with 21-karat gold trading at EGP 6,720 per gram. Meanwhile, gold prices on international markets dropped by $38, bringing the ounce price down to $4,502, according to World Gold Council data at the time of writing.

The report added that 24-karat gold recorded EGP 7,680 per gram, while 18-karat gold traded at EGP 5,760 per gram. The gold sovereign reached EGP 53,760.

Despite the recent decline, local gold prices remain approximately EGP 106 per gram above their global equivalent, reflecting continued caution among traders regarding potential movements in the U.S. dollar exchange rate in the coming period.

According to Marsad Al Dahab data, local gold prices declined by EGP 190 per gram, or 2.7%, during May, while gold prices on international markets fell by around 1% over the same period.

Globally, gold extended its losses at the start of the week as the U.S. dollar strengthened and Treasury yields remained elevated, limiting demand for the precious metal despite ongoing geopolitical risks in the Middle East.

Markets continue to monitor negotiations between Washington and Tehran, with disagreements over Iran's nuclear program and the Strait of Hormuz adding uncertainty to the global economic outlook.

Meanwhile, recent developments in the region have contributed to a rebound in crude oil prices from their lowest levels in more than a month, reviving inflation concerns and reinforcing expectations that major central banks may maintain restrictive monetary policies for longer. This environment has supported the U.S. dollar and weighed on gold prices.

Joseph Capurso, Head of International and Sustainable Economics at Commonwealth Bank of Australia, said the U.S. dollar is likely to remain highly sensitive to developments in the Middle East conflict and upcoming U.S. labor market data. He added that easing geopolitical tensions and the normalization of global energy flows could reduce oil's influence on currency markets and shift attention back to interest rate expectations.

Investors are now awaiting a series of important U.S. economic releases this week, beginning with the ISM Manufacturing PMI. However, market focus remains firmly on Friday’s Nonfarm Payrolls (NFP) report, which could play a decisive role in shaping expectations for Federal Reserve policy and short-term demand for the U.S. dollar.

Gold is expected to remain driven by a combination of geopolitical developments, U.S. economic data, movements in the dollar, and oil price trends, which currently represent the key forces influencing the precious metal across global markets.