Gold Fluctuates Between Fed Pressures and Geopolitical Tensions: Global Gains and Local Losses

Gold prices in the local market saw a slight decline over the past week, despite notable gains in global markets. This occurred amid an economic environment shaped by conflicting signals from the U.S. Federal Reserve, mixed labor market data, and intensifying global trade tensions.

Locally, gold lost around 0.6% of its value, with the price of 21-karat gold falling by EGP 30 during the week — from EGP 4,630 to EGP 4,600 per gram. In contrast, global prices rose by 0.8%, with gold climbing from $3,337 to $3,363 per ounce, supported by weaker U.S. employment data and a softer dollar.

Other domestic gold prices included:

24K gold: EGP 5,257 per gram

18K gold: EGP 3,943 per gram

14K gold: EGP 3,067 per gram

Gold pound: EGP 36,800

Globally, gold benefited from renewed trade concerns and geopolitical risks, in addition to the weaker-than-expected U.S. jobs report, which bolstered expectations of a rate cut in September and increased safe-haven demand.

From Sell-Off to Recovery: Gold Regains Shine After Weak Data

Markets experienced heightened volatility throughout the week. Gold came under heavy selling pressure on Wednesday after the Federal Reserve held interest rates steady. Fed Chair Jerome Powell offered no firm commitment to a rate cut in September, pushing gold prices to a four-week low of $3,268 per ounce.

However, the market quickly rebounded on Friday following the release of the July jobs report, which revealed that the U.S. economy added only 73,000 jobs, well below expectations. Moreover, job figures for May and June were revised downward by 258,000 jobs — the largest two-month revision since April 2020.

These figures raised alarm about a sharper-than-expected labor market slowdown, triggering a drop in the U.S. dollar and pushing gold back up to $3,363 per ounce as markets increased their bets on monetary easing.

A Rare Fed Split and Surprise Resignation

Amid these developments, the U.S. Federal Reserve saw a rare internal division. Two members of the Fed's Board of Governors voted against holding interest rates steady, calling instead for a rate cut — the first public dissent in over 30 years. Their opposition coincided with the sudden resignation of Adriana Kugler, a member of the Board, for undisclosed reasons. Her departure gives President Trump a key opportunity to nominate a new, more dovish member.

According to the CME FedWatch Tool, the probability of a rate cut in September surged to 92%, increasing the likelihood that gold could breach the $3,400 per ounce level in the near term.

Investment Demand on the Rise

A recent report by the World Gold Council highlighted a sharp increase in demand for gold-backed ETFs, now at their highest level since 2020. This surge reflects a broader investor shift toward safe-haven assets amid economic uncertainty.

On the trade front, tensions escalated after the U.S. imposed new tariffs on imports from several countries, including Canada, India, Switzerland, South Africa, and Taiwan — with some duties reaching as high as 39%. The White House set an August 1st deadline for finalizing new trade agreements, adding further strain to global markets and boosting investor interest in gold.

Gold’s Year-to-Date Performance

Since the beginning of the year, 21K gold has gained EGP 860, marking a 23% increase, while the global price per ounce rose by $739, or 28%. The World Gold Council also reported that gold surged by 40% in Q2 2025 compared to the same period last year.

Looking Ahead: Key Data in Focus

In the coming week, markets will closely monitor:

U.S. services PMI data (Tuesday)

10-year U.S. Treasury bond auction (Wednesday)

Bank of England monetary policy decision (Thursday)

U.S. weekly jobless claims data (Thursday)

Gold's Enduring Role as a Safe Haven

In this turbulent landscape, gold continues to affirm its historic role as a reliable store of value — immune to the volatility of monetary policy and the fragility of fiat currencies. As signs of a global economic slowdown persist, the yellow metal is increasingly seen as a strategic hedge against uncertainty and a cornerstone of defensive investment portfolios.