Gold prices in local markets rose by approximately 0.7% during last week's trading, in parallel with a 1.9% increase in the global ounce price, driven by escalating geopolitical tensions and concerns over a worsening sovereign debt crisis.
The price of 21-karat gold rose by EGP 30 over the week, opening at EGP 4,610 per gram and closing at EGP 4,640. Meanwhile, the global ounce price climbed by $63, from $3,274 to $3,337.
The 24-karat gold gram recorded EGP 5,303, 18-karat stood at EGP 3,977, and 14-karat reached EGP 3,094, while the gold pound (8 grams of 21-karat) was priced at EGP 37,120.
The local market saw relative stability during Saturday's trading, coinciding with the weekend closure of global exchanges. The 21-karat gram opened at EGP 4,640, dipped slightly to EGP 4,630, and closed again at EGP 4,640.
Global Market Dynamics Support Gold Despite Strong U.S. Labor Data
Despite the release of robust U.S. labor market data, gold continued its upward trend globally, supported by expectations that the U.S. dollar may face further pressure in the coming period. This coincides with the approaching expiration of the temporary suspension on global tariffs imposed by former U.S. President Donald Trump, scheduled for July 9.
According to Treasury Secretary Scott Besant, the U.S. may impose reciprocal tariffs of no less than 10% on around 100 countries, with expectations of reaching several trade agreements ahead of the deadline.
The U.S. Department of Labor announced that the economy added 147,000 jobs in June, exceeding analysts’ expectations of 111,000, while the unemployment rate fell to 4.1%. These figures prompted markets to reduce bets on an imminent rate cut, lowering expectations of a July cut to just 25%.
Geopolitical Tensions Add to Gold's Appeal
On the geopolitical front, Trump stated that he discussed the Ukraine file with Russian President Vladimir Putin without notable progress, while informing Ukrainian President Volodymyr Zelenskyy that the U.S. remains prepared to support Ukraine’s air defense systems.
On the legislative front, the U.S. administration is pushing to pass a massive fiscal bill dubbed "The Big Beautiful Sheet," aimed at extending most of the 2017 tax cuts set to expire in 2025. According to Congressional Budget Office estimates, this bill would increase the federal deficit by $3.4 trillion over the next ten years, potentially weakening the dollar and driving investors to gold as a safe-haven asset.
Gold Eyes $3,500 Target as Investment Flows Increase
Analysts believe that gold’s main driver at this stage remains investment inflows, as central banks and reserve managers continue to diversify their holdings away from the U.S. dollar in favor of alternative assets—most notably gold. This is likely to enhance demand and push the precious metal toward record levels, possibly reaching $3,500 per ounce by year-end.
Upcoming Economic Events to Watch:
Tuesday: Reserve Bank of Australia monetary policy meeting
Wednesday: Minutes of the U.S. Federal Reserve’s June FOMC meeting
Thursday: Weekly U.S. jobless claims report
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