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Gold Prices Decline Amid Hawkish Fed Remarks


Gold Prices

Wed 26 Jun 2024 | 03:19 PM
Waleed Farouk

Gold prices witnessed a consistent drop in the local markets on Wednesday, impacted by hawkish comments from members of the US Federal Reserve.

The markets are now focusing on the upcoming US inflation data scheduled for release this Friday.

Saeed Imbaby, CEO of the "iSagha" platform for trading gold and jewelry online, reported a decline in gold prices by about EGP 10 during today's trading session compared to the closing prices of the previous day.

The price of 21-karat is now at EGP 3,150, while the global ounce price dropped by $4 to settle at $2,305.

Imbaby provided further details, noting that 24-karat gold is now priced at 3,600 EGP per gram, 18-karat gold at EGP 2,700, and 14-karat at EGP 2,100. Additionally, the gold pound is currently priced at EGP 25,200.

On Tuesday, the local gold markets experienced price fluctuations. The 21-karat gold opened at EGP 3,160, peaked at EGP 3,175, and closed at EGP 3,160, while the ounce price dropped by 23 dollars from $2,332 to $2,309 by the end of the trading session.

Imbaby attributed the decline in local gold prices to the drop in global ounce prices following the hawkish statements from Federal Reserve officials concerning interest rate cuts amidst rising US inflation rates.

He predicted that gold markets would continue to experience narrow price fluctuations between EGP 10 and 20 until the end of the week or until more significant movements occur in global markets based on economic data.

Federal Reserve Governor Lisa Cook mentioned that "at some point, it will be appropriate to cut interest rates," but added that maintaining the current rate level is currently the correct strategy "to respond to economic expectations."

On Tuesday, Federal Reserve Governor Michelle Bowman stated that it is not yet appropriate to cut interest rates. Inflation data needs to move more sustainably toward the Federal Reserve's 2.0% target before it is time "to gradually cut the interest rate."

On Monday, Mary Daly, President of the San Francisco Federal Reserve, expressed that the Federal Reserve should not cut interest rates until there is greater confidence that inflation is moving toward 2.0%. However, she also emphasized the importance of not focusing solely on inflation at the expense of the labor market.

Daly added that while the labor market is strong, it might face rising unemployment rates if inflation persists.