Gold Inches Higher as Markets Remain Calm Amid Escalating Tensions

Gold prices saw a modest rise in local markets on Monday, reflecting a similar uptick in global bullion, as geopolitical risks mount and traders remain on edge awaiting Iran’s response to U.S. military actions. Yet, despite the unfolding events, financial markets displayed an unusual calm — a tone more reflective of cautious observation than panic.

In local markets, gold climbed by EGP 25 per gram compared to Saturday evening, with 21-karat gold recording EGP 4,825 per gram. Globally, the ounce hovered around $3,381, recovering slightly after a week of losses.

Across other karat levels:

24k gold reached EGP 5,514

18k traded at EGP 4,136

14k at EGP 3,217

The gold pound stood at EGP 38,600

Last week’s performance, however, painted a different picture — gold had declined by EGP 100 locally and lost $61 per ounce globally, pulled down by a stronger dollar and markets repositioning for tighter U.S. monetary policy.

A Strange Calm in the Face of Conflict

Despite U.S. airstrikes on Iranian nuclear facilities, described by former President Donald Trump as a “highly successful operation,” there was no rush into safe havens. Trump’s warning of “more targets” unless Tehran backs down did little to shake global equity markets or ignite a gold rally.

Instead, markets are treading carefully, perhaps calculating that Iran’s ability to respond is currently constrained — politically, militarily, or both.

This atmosphere of "measured calm", as some analysts put it, has kept gold’s gains in check. While prices edge higher, they remain confined within familiar technical boundaries, with $3,400 an ounce still acting as a stubborn ceiling.

Economic Signals Blur the Picture

Meanwhile, fresh data from S&P Global on Tuesday showed that U.S. economic activity continues to grow, albeit at a slower pace. The Composite PMI for June dipped slightly to 52.8, down from 53.0 in May. Yet this still marks the 29th consecutive month of expansion in output — a testament to the economy's resilience.

The data showed:

The Manufacturing PMI held steady at 52.0, beating expectations

The Services PMI rose to 47.7, up from 46.4, yet still signaling contraction

For gold traders, these numbers offered little clarity. Growth is holding up, but so is inflation. This duality suggests the Federal Reserve will stay cautious, maintaining interest rates at elevated levels for longer.

Commenting on the outlook, Saeed Embabi, Executive Director of the iSagha platform, noted that this mix of moderate growth and sticky inflation means rate cuts are likely off the table for now. The Fed’s balancing act — between containing inflation and supporting the economy — has only grown more complex.

All Eyes on Powell and U.S. Data

The markets now turn to a critical week of data releases and testimony. Fed Chair Jerome Powell is set to speak before Congress on Tuesday and Wednesday, and investors will be parsing every word for clues on future policy.

In addition, the U.S. will release:

Consumer Confidence Data on Tuesday

New Home Sales, Durable Goods, Jobless Claims, and GDP on Thursday

The closely watched Core PCE Inflation Reading on Friday — a potential game-changer

With global tensions simmering and economic signals mixed, the path for gold remains uncertain. But as always, uncertainty itself may be the metal’s greatest ally.