Gold Hits 2-Week High on Weak Dollar and Rising Bets for Fed Rate Cut

Gold prices rose in both local and global markets on Monday, marking their highest level in two weeks, supported by growing expectations that the US Federal Reserve will deliver another interest rate cut at its upcoming December meeting, according to a report by “iSagha”, the gold and jewelry trading platform.

According to Saeed Embabi, CEO of iSagha, domestic gold prices climbed by EGP 110 during today’s trading, with 21-karat gold reaching EGP 5,455 per gram, while the ounce gained about $100 to hit $4,101.

He added that 24-karat gold recorded EGP 6,234, 18-karat reached EGP 4,676, and 14-karat stood at EGP 3,634, while the gold pound coin stabilized at EGP 43,640.

Gold prices had slipped by about EGP 5 last week, as 21-karat gold opened at EGP 5,350 and closed at EGP 5,345, while the ounce fell slightly from $4,003 to $4,001.

Strong Bets on a Fed Rate Cut

Globally, weak US economic data reinforced market expectations for another interest rate cut next month, while a softer dollar provided further support for bullion.

According to the CME FedWatch tool, markets now assign a 64.6% probability that the Federal Reserve will reduce rates by 25 basis points to a range of 3.50%-3.75%, marking the third consecutive cut this year.

The report also noted that the US dollar came under mild selling pressure as investor sentiment turned more optimistic following Senate approval of a temporary funding bill to reopen federal agencies, lifting market morale.

However, Austan Goolsbee, President of the Chicago Federal Reserve, struck a cautious tone, warning that assessing the economic outlook remains difficult in the absence of inflation data due to the government shutdown — keeping markets in a watchful mood.

Safe-Haven Demand Strengthens

Gold’s appeal as a safe haven grew amid persistent trade and geopolitical tensions, compounded by weak US employment data in October, with job losses in the government and retail sectors. Meanwhile, consumer sentiment fell to its lowest level in nearly three and a half years, according to the University of Michigan survey.

At the same time, the US Senate proposed legislation to end the 40-day government shutdown, which has sidelined hundreds of thousands of federal workers. White House economic adviser Kevin Hassett warned in an interview that continued closure could push fourth-quarter US growth into negative territory.

Global Market Analysis: Gold and Silver Rally Together

Silver prices surged 3.4% to $49.95 per ounce, their highest since October 21, while platinum gained 1.7% to $1,571.10.

Analysts believe that reopening the government would restore the flow of key economic data, giving the Fed a clearer picture ahead of its December meeting. Yet, it also shifts focus back to America’s widening fiscal deficit, which now stands near 6% of GDP.

In this context, President Donald Trump’s announcement of a $2,000 “tariff dividend” for low-income households — financed by tariff proceeds and additional borrowing — sparked criticism for contradicting efforts to contain inflation and manage debt.

Gold on Track for Record Highs

A research note from Saxo Bank projected that gold could approach $5,000 per ounce within the next 12 months, while silver may reach $65, noting that such a move would signal a major shift in investor behavior and perceptions of global risk.

China: Higher Output, Weaker Demand

Data from the China Gold Association showed that the country produced 271.78 metric tons of gold in the first nine months of 2025, up 1.39% year-on-year, while gold consumption fell 7.95% to 682.73 tons.

Jewelry consumption dropped sharply by 32.5% to 270.04 tons, while bar and coin demand rose 24.55% to 352.12 tons, and industrial use increased 2.72% to 60.58 tons.

The association noted that investment demand for bars and coins remained strong amid growing geopolitical tensions and economic uncertainty, while lightweight, high-value jewelry continued to attract consumers. Additionally, expanding sectors such as electronics and new energy helped sustain industrial demand for gold.