Gold Prices See 6% Drop in Local Markets Within a Week

Gold prices in local markets saw a significant decrease of 6% during the past week, ending last Saturday. Concurrently, the global market recorded a 1% decline in the price per ounce over the same period, ending last Friday. This downturn is largely attributed to diminishing expectations that the US Federal Reserve will conclude its monetary tightening cycle and lower interest rates by June.

Saeed Embabi, the Executive Director of the "iSagha" online gold and jewelry trading platform, provided detailed insights into the local market's performance. According to Embabi, the Egyptian market saw gold prices drop by 190 EGP during the last week. Specifically, the price for a gram of 21-karat gold commenced at 3170 EGP and concluded the week at 2980 EGP. Internationally, gold's price per ounce fell by 23 USD, starting at 2179 USD and settling at 2156 USD by week's end.

Embabi further broke down the current prices for various karats of gold in Egypt, noting that 24-karat gold is now priced at 3406 EGP per gram, 18-karat at 2554 EGP per gram, 14-karat at around 1987 EGP per gram, and the traditional gold pound is valued at 23840 EGP.

Despite the week's overall downward trend, gold prices saw a modest recovery on the final day, with 21-karat gold per gram increasing by 30 EGP, opening at 2950 EGP and closing at 2980 EGP. This rise coincided with the global market's weekend closure.

He highlighted the seasonal impact of Ramadan on Egypt's gold market, noting a typical decrease in demand which, in turn, leads to lower prices.

He also discussed the broader economic factors at play, including the stabilization of the exchange rate due to a steady flow of dollar inflows to the Central Bank, bolstered by the normalization of remittances from Egyptians working abroad and the public's increasing propensity to exchange dollars at banks and exchange offices.

The global gold market is currently facing uncertainty, particularly regarding the US Federal Reserve's monetary policy direction and the future of interest rates amidst mixed economic indicators.

Embabi underscored the critical nature of potential interest rate reductions by the Federal Reserve to forestall a recession, against the backdrop of Middle Eastern geopolitical tensions, heightened central bank gold purchases, and growing investment demand for gold.

These elements collectively have the potential to drive gold prices to unprecedented highs in the coming year. Market participants are eagerly anticipating the outcome of the Federal Open Market Committee's meeting on March 19 and 20, with widespread expectations for interest rates to remain steady.