Gold Gains EGP 490 Locally During Last September

Gold recorded a significant increase in local and global markets during September, driven by increased demand for safe havens amidst geopolitical and economic uncertainty, along with anticipation of Federal Reserve decisions on interest rate cuts next month.

Said Embaby, CEO of "iSagha" online gold and jewelry trading platform, stated that gold prices in the local market rose by 11%, or EGP 490, during September. The 21-carat gram opened the month's trading at EGP 4690 and closed at EGP 5180. Globally, the ounce increased by 12%, or $411, opening the month's trading at $3447 and closing at $3858.

He explained that gold witnessed a remarkable rise in local and global markets during September, propelled by increased demand for safe havens amidst geopolitical and economic uncertainty, in addition to the US Federal Reserve's leaning towards cutting interest rates.

According to the report, gold reached a new record high today, ending September with its best monthly performance in 16 years, supported by fears of a US government shutdown and increasing expectations of federal interest rate cuts, along with strong demand for safe assets.

Since the beginning of the year, prices have surged locally by approximately EGP 1490, an increase of 40%, while globally they have risen by around $1264, a 48% increase.

Gold prices in local and global markets rose to their all-time highs during Wednesday's trading, as the US government entered its first shutdown in nearly seven years after lawmakers failed to reach an agreement on government funding.

The CEO of "iSagha" said that gold prices rose by about EGP 60 during today's trading compared to yesterday's close, with the 21-carat gold gram reaching EGP 5240. Globally, the ounce climbed by about $30 to $3888, after touching $3900 in the morning as its highest price in history.

He added that the 24-carat gold gram recorded EGP 5989, 18-carat reached EGP 4491, and 14-carat reached EGP 3487, while the price of a gold pound stabilized at EGP 41920.

Bets on interest rate cuts by the Federal Reserve strengthened, with markets estimating a 96% probability of a 25 basis point cut in October, and an 87% possibility of another cut in December.

The US government officially entered a shutdown on Wednesday morning after Congress failed to pass a bill to fund the new fiscal year, forcing many federal operations to halt while essential services remained open. A last-minute temporary measure, approved in the Republican-majority House of Representatives, was put to a vote in the Senate on Tuesday but only secured 55 votes against the 60 needed to proceed.

This political deadlock led to hundreds of thousands of federal employees facing the risk of furlough or working without pay, and key US economic data releases, including weekly jobless claims on Thursday and the non-farm payrolls report on Friday, are expected to be delayed.

Meanwhile, the political stalemate added pressure on the already weak US dollar, making gold more accessible to foreign buyers. Furthermore, the prospects of more interest rate cuts by the Federal Reserve and increasing geopolitical risks provided additional support for the yellow metal's price surge.

Markets were unsettled by US President Donald Trump's aggressive statements on Tuesday, just hours before the government shutdown began. According to Reuters, Trump warned that a funding halt would allow his administration to take "irreversible" actions, including cutting programs and laying off many employees.

US job openings increased slightly to 7.23 million in August, slightly exceeding expectations, while hiring and quits saw only marginal changes, reinforcing indicators of a gradually slowing labor market. At the same time, US consumer confidence fell to 94.2 in September, its lowest level since April, as concerns about job availability and inflation affected sentiment, further strengthening expectations for more interest rate cuts by the Federal Reserve.

According to the CME FedWatch tool, traders now estimate a 95% probability of a 25 basis point rate cut at the October meeting, and a 78% probability of another cut in December.

On Tuesday, Susan Collins, President of the Federal Reserve Bank of Boston, said: "It may be appropriate to ease the policy rate somewhat this year, but the data will have to show that," while Lorie Logan, President of the Federal Reserve Bank of Dallas, warned that "there may be relatively limited room for further rate cuts."

Federal Reserve Vice Chairman Philip Jefferson avoided giving any clear indication on monetary policy, noting that "both sides are under pressure."

The latest ADP figures were much weaker than expected, showing that the US private sector lost 32,000 jobs in September, defying expectations of a gain of around 50,000 jobs. Adding to the pessimistic tone, August's figure was sharply revised to a loss of 3,000 jobs from an initial gain of 54,000 jobs. The US economic calendar will include the release of manufacturing PMI data from S&P Global and ISM, along with remarks from Richmond Federal Reserve President Thomas Barkin.