Gold prices rose in both local and global markets on Tuesday, with the metal hitting an all-time high, surpassing the previous record set in April. The surge followed U.S. President Donald Trump’s announcement of new tariffs — dubbed “Liberation Day” duties — amid a weaker dollar and mounting expectations of a Federal Reserve interest rate cut this month.
Local gold prices climbed by EGP 15 during today’s session compared with Monday’s close, with 21-karat gold reaching EGP 4,740 per gram. Globally, spot gold rose by $10 to trade at $3,487 per ounce, after touching an intraday high of $3,509.
Other domestic benchmarks were as follows:
24-karat: EGP 5,417
18-karat: EGP 4,063
14-karat: EGP 3,160
Gold pound coin: EGP 37,920
On Monday, gold had already gained EGP 35, with 21-karat starting the day at EGP 4,690 and closing at EGP 4,725. Globally, the ounce advanced by $30, rising from $3,447 to $3,477.
Drivers Behind the Rally
Gold’s rally to record highs has been underpinned by robust investment demand, with the precious metal increasingly viewed as a safe haven in the face of global economic uncertainty.
Investor appetite has strengthened as Trump’s interventions at the Federal Reserve — including pressure on Chair Jerome Powell and an attempt to oust Governor Lisa Cook — raised fears about the central bank’s independence. Analysts warn that politically driven rate cuts could exacerbate inflationary pressures, further boosting gold’s appeal.
Analysts’ Comments
Rising uncertainty continues to enhance gold’s attractiveness. As one analysis put it, “Trump’s direct challenge to Fed independence, coupled with the U.S. budget deficit, are the key drivers of gold prices at the moment.”
Silver also reached a record high on Tuesday, up 0.3% to $40.8 per ounce, though it still trades at a discount to gold relative to historical averages. The gap, however, has narrowed recently amid growing investor interest.
In parallel, Christine Lagarde, President of the European Central Bank, warned that Trump’s efforts to undermine Fed independence pose a “very grave risk” to the global economy. She added that if the Fed were forced to respond to political pressures, the impact would be “deeply troubling” for U.S. economic stability and, by extension, the rest of the world.
Geopolitical Dimensions
The fading hope of a swift resolution to the war in Ukraine has helped fuel the rally, while intensifying conflicts in other regions — notably the Middle East — have reinforced gold’s role as a safe-haven asset.
Institutional Outlook
Analysts at Goldman Sachs noted in a recent report that inflows into gold-backed exchange-traded funds (ETFs) have emerged as a critical source of demand, significantly supporting prices. They forecast spot gold to reach $4,000 per ounce by mid-next year.
Since the start of 2023, gold prices have nearly doubled, driven by aggressive central bank purchases aimed at hedging against inflation. Last year, gold overtook the euro to become the world’s second-most common reserve asset after the dollar, representing about 20% of official global reserves.
According to the World Gold Council, top buyers included India, China, Turkey, and Poland, reflecting a broader trend of de-dollarization among emerging economies.
Strategic Shifts
Economic reports highlight a historic shift: for the first time since 1996, central banks now hold more gold than U.S. Treasury bonds. Experts describe this as a “major global rebalancing.”
Charles-Henry Monchau, Chief Investment Officer at Switzerland’s Syz Group, explained: “This shift reflects the determination of major economies, particularly Russia and China, to strengthen their influence by hoarding gold as a strategic asset that provides protection against crises and sanctions.”
U.S. Economic Agenda This Week
Markets are awaiting a slate of U.S. economic data that could shape the Fed’s monetary policy outlook:
Tuesday: ISM Manufacturing PMI
Wednesday: JOLTS Job Openings
Thursday: ADP Employment Report, Initial Jobless Claims, ISM Services PMI
Friday: Nonfarm Payrolls (NFP) — the most closely watched indicator of Fed policy direction
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