Gold Holds Steady Locally Despite Global Declines After the U.S. Federal Reserve Cuts Interest Rates

Gold prices in the local market remained stable during Thursday’s trading, despite a slight drop in the international spot price, amid mixed influences that include a marginal rise in the U.S. dollar, the recent interest rate cut by the Federal Reserve, and ongoing geopolitical tensions linked to the Russia–Ukraine war, according to a report by the “ISagha” gold and jewelry trading platform.

Saeed Embabi, CEO of iSagha, said that gold prices in the local market recorded relatively steady levels, with 21-karat gold trading at EGP 5,630 per gram, 24-karat at EGP 6,434, and 18-karat at EGP 4,826, while the gold pound coin stabilized at EGP 45,040.

Globally, spot gold fell by about $13, recording $4,217 per ounce, despite having gained more than 61% since the beginning of the year.

The U.S. dollar recovered part of its losses following the recent Fed meeting, approaching its lowest level since October 24, which limited gold’s ability to capitalize on its daily gains.

Despite the dollar’s uptick, analysts believe its upward potential remains limited amid rising expectations of further U.S. interest-rate cuts, a factor that directly supports gold in the coming period, alongside persistent geopolitical uncertainty.

In a widely expected move, the U.S. Federal Reserve cut interest rates by 25 basis points, projecting only one additional rate cut in 2026, even though markets anticipate two more cuts during the same year, after Fed Chair Jerome Powell hinted at a more flexible monetary stance.

Powell pointed to the risks of a slowdown in the U.S. labor market, stressing that the Fed does not want its policies to hinder job creation. His remarks pushed the dollar to its lowest level in more than a month, helping gold achieve its highest weekly level.

However, Powell did not offer guidance on the timing of the next rate cut, as some Fed members oppose further easing. This has reinforced uncertainty and limited the strength of gold, which yields no income to holders.

Geopolitical Risks and Capital Flows Reinforce Safe-Haven Demand

Although investors have shifted some focus toward higher-risk assets, the slow progress in ceasefire negotiations between Russia and Ukraine has kept gold’s safe-haven appeal intact, preventing sharp declines in its price. Meanwhile, market participants await U.S. unemployment and trade balance data scheduled for release on Thursday.

Fed Keeps Its Economic Projections and Dot Plot Unchanged

The Federal Reserve made no major changes to its economic outlook, while the “dot plot” remained unchanged, forecasting interest rates to fall to 3.4% next year, with a potential further cut in 2027. The Fed anticipates moderate economic growth of 2.3% in the coming year, and a slight increase in unemployment to 4.4%.

Inflation is expected to gradually decline toward the Fed’s 2% target by 2028, with core inflation projected to ease to 2.4% next year, compared to 3% in the October estimates.

Wells Fargo Forecast: Gold to Hit Record Levels in 2026

In a related development, Wells Fargo Bank expects gold to continue rising in 2026, driven by several factors including strong central bank buying, a weaker U.S. dollar, additional rate cuts, and ongoing geopolitical tensions.

The bank forecasts gold prices to increase by 5.8% to 10% next year, reaching between $4,500 and $4,700 per ounce, affirming that the long-term upward trend for the metal remains intact.

Wells Fargo noted that gold will remain a key component in investment portfolios, particularly in light of global inflationary pressures, declining interest in digital currencies, and a renewed shift by investors toward safer stores of value.