Gold prices in local markets rose by 0.8% over the past week, while the ounce gained 1% on the global exchange, supported by growing expectations that the U.S. Federal Reserve will continue its accommodative monetary policy next year, according to a report by I Sagha platform.
Saeed Embaby, the platform’s CEO, stated that local gold prices increased by about EGP 45 during the week, with the 21-carat gram opening at EGP 5,745, reaching 5,800, and closing at 5,790. Globally, the ounce rose by approximately $40, opening at $4,299 and closing near $4,339.
Embaby added that the 24-carat gram reached EGP 6,617, the 18-carat gram recorded EGP 4,963, and the gold pound stood at EGP 46,320.
Since the beginning of 2025, local gold prices have surged by about EGP 2,050, a 55% increase, while the ounce rose by around $1,715, up 65%, achieving its best annual performance since 1979. The rally has been supported by central bank purchases amid the move away from the U.S. dollar, rising inflation rates, and expectations of future interest rate cuts.
During the past week, gold prices approached $4,374 per ounce on Thursday, close to the year’s peak of $4,381, despite rising global bond yields. The increase was supported by U.S. economic data showing a decline in consumer confidence and a slight drop in inflation expectations.
Data from the University of Michigan indicated that the U.S. consumer confidence index fell in December to 52.9 points, down from 53.3 previously, and below the expected 53.5. Survey participants anticipated higher unemployment and a continued decline in durable goods purchases for the fifth consecutive month. One-year inflation expectations rose to 4.2%, while five-year expectations remained at 3.2%.
U.S. Treasury yields rose following the Bank of Japan’s decision to raise interest rates from 0.50% to 0.75%, pushing the 10-year U.S. Treasury yield up by 2.5 basis points to 4.147%, with real yields climbing to 1.907%. Normally, gold moves inversely to yields, yet the metal continued its gains supported by demand factors.
John Williams, President of the Federal Reserve Bank of New York, noted that recent data indicate further easing of inflation, suggesting that the rise in unemployment may be due to temporary distortions, and affirmed that there is no urgent need to adjust monetary policy at this time.
Regarding inflation, the U.S. Consumer Price Index for November rose by 2.7% versus 3% in the previous reading. Economists cautioned that the data should be interpreted carefully due to the impact of a 43-day government shutdown on the accuracy of some indicators.
Markets are currently pricing in cumulative U.S. rate cuts of about 60 basis points next year, with the first cut likely in June. Traders estimate roughly a 20% probability of a rate cut at the January 28 meeting.
Goldman Sachs, in a recent note, projected that gold prices could rise 14% to reach $4,900 per ounce by December 2026 under the base scenario, with additional upside risks if retail investors expand portfolio diversification.
Goldman emphasized that strong demand from central banks, coupled with periodic support from Fed rate cuts, will continue to bolster gold prices, reaffirming their recommendation to maintain long-term positions in the precious metal.
Looking ahead, markets are set to monitor key U.S. economic data in the coming week, including ADP employment changes, preliminary Q3 GDP growth, durable goods orders, and industrial production data.
Follow the latest news on Google News
