Gold Falls Locally and Globally Amid Sharp Shifts in Interest-Rate Expectations

Gold prices in the Egyptian market recorded a slight decline of around 0.1% during last week’s trading, while the global ounce fell by 0.5% under pressure from a stronger U.S. dollar and fading investor bets on an imminent rate cut by the Federal Reserve in December, according to a report issued by Ai Sagha, the gold and jewelry trading platform.

Saied Embaby, the platform’s CEO, stated that the price of 21-karat gold dropped by about EGP 5 during the week, after opening at EGP 5,455 and closing at EGP 5,450, while the global ounce retreated by USD 21—from USD 4,086 to USD 4,065.

The report noted that 24-karat gold stood at EGP 6,229, 18-karat gold at EGP 4,671, while the gold pound stabilized at EGP 43,600.

Weak Momentum in Precious Metals Despite Global Tensions

Despite geopolitical challenges and increasing talk of potential monetary easing, precious metals delivered a lackluster performance throughout the week, as investors focused on the movement of technology and AI stocks, while all eyes remained on the Federal Reserve for a decisive signal on the December interest-rate decision.

U.S. Labor Market Surprises the Markets

The U.S. Bureau of Labor Statistics issued its first report following the government shutdown, announcing the addition of 144,000 jobs in October—far above expectations of around 50,000—while the unemployment rate rose to 4.4%, nearing its highest level in four years.

The Bureau confirmed that October’s data will be merged into the November report, scheduled for release on December 16—just after the Federal Reserve’s meeting.

Fed officials delivered mixed messages:

• John Williams and Steven Miran hinted at the possibility of a near-term rate cut,

• while Susan Collins and Lorie Logan adopted a more cautious tone, suggesting current policy remains appropriate.

Meanwhile, the University of Michigan's Consumer Sentiment Index declined to levels near its historical low, and inflation expectations fell for both the short-term and five-year horizons.

Ten-year U.S. Treasury yields stabilized at 4.08%, while real yields dipped to 1.84%.

Gold Approaches Best Annual Performance Since 1979

Gold continues to post strong results in the fourth quarter: up 10% in September, 5% in October, and 4% in November. This brings its annual rise close to 55%, potentially setting the stage for its best year since 1979, with some forecasts suggesting the metal could reach USD 5,000 per ounce in 2026.

The rally is supported by several factors, most notably:

• expanding central-bank allocations to gold, aiming for 30% of reserves versus the current 20%;

• a 17% increase in ETF gold holdings since the start of the year;

• growing reliance on commodities as a hedge against inflation and currency weakness;

• and expectations of renewed rate cuts in 2026.

G20 Report: Selling Part of the IMF’s Gold to Help Finance Africa’s Debt

A panel of experts from the G20 has proposed selling part of the International Monetary Fund’s vast gold reserves at current high prices to help address the severe debt burdens facing African nations.

The report was delivered to South African President Cyril Ramaphosa, who welcomed the recommendation ahead of the first G20 summit ever held on the continent.

According to the report, 3.4 billion people live in countries that spend more on servicing debt than on education or healthcare, while the public debt of developing nations exceeded USD 31 trillion in 2024.

Trevor Manuel, former South African finance minister and chair of the expert panel, noted that the IMF still values part of its gold at USD 50 per ounce, despite actual market prices exceeding USD 4,100, and called for a transparent mechanism to sell a portion of the holdings.

Precious Metals Markets: Record Demand for Gold and Silver in the UK

The UK Royal Mint reported record demand for precious metals during the third quarter.

According to its data:

• revenues from gold coin sales jumped 102% year-on-year and 6% quarter-on-quarter;

• silver coin sales rose 44% quarter-on-quarter and 83% year-on-year.

Both silver and platinum reached their highest-ever investment demand, as investors turned to alternative metals following gold’s surge.

Stuart O’Reilly, the Mint’s Market Insights Director, stated that global uncertainty is driving both new and experienced investors to increase their holdings of tangible assets. He noted that the number of buyers in October rose by 70%, and their spending doubled compared to the previous year.

Despite this strong momentum in the UK, the World Gold Council reported that the United States was the only country where demand for gold bars and coins declined during the third quarter, dropping to 7 tonnes—its lowest level since 2017.