Gold hits all-time high as Middle East tensions escalate

Gold prices rose in local markets during trading on Tuesday, with the ounce on the global stock exchange hitting an all-time high. Geopolitical tensions and trade uncertainty fueled strong demand for safe havens.

Gold prices rose by about EGP 50 in local markets during trading today, compared to yesterday's trading. The price of a gram of 21-karat gold reached EGP 4,280, while an ounce rose by about $35, reaching $3,036.

Mbappe added that a gram of 24-karat gold reached EGP 4,892, a gram of 18-karat gold reached EGP 3,669, and the gold pound reached about EGP 34,240. Gold prices rose in local markets by about EGP 90 during trading on Monday. The price of a gram of 21-karat gold opened at EGP 4,210 and closed at EGP 4,230. Meanwhile, the price of an ounce rose $16 on the global stock exchange, opening at $2,985 and closing at $3,001.

Gold prices continued their wave of consecutive increases, reaching an all-time high of $3,036 per ounce on Tuesday, as geopolitical tensions and trade uncertainty fueled strong demand for safe haven assets.

Renewed conflict in the Middle East was a major driver of rising gold prices. Israeli airstrikes on the Gaza Strip intensified, with Palestinian health officials reporting more than 400 deaths. The collapse of a two-month ceasefire exacerbated market concerns, prompting investors to increase their investments in gold as a hedge against geopolitical instability.

The ceasefire violation comes just hours before a phone call between US President Donald Trump and Russian President Vladimir Putin to reach a final agreement to end the war in Ukraine. Meanwhile, the German parliament is set to vote on a new budget on Tuesday that could increase defense spending by approximately $49 billion, according to Bloomberg.

US President Donald Trump's tariff policies have heightened uncertainty. His administration has already imposed 25% tariffs on steel and aluminum, effective since February, and plans to impose additional reciprocal and sectoral tariffs on April 2. These measures could disrupt global trade, heighten inflation risks, and increase the appeal of gold as a store of value.

Gold prices have risen 15% since the beginning of the year, reaching 14 record highs. While some correction is expected around $3,050, analysts expect further gains if current catalysts persist, amid strong safe-haven demand and the prospect of a US interest rate cut.

UBS Group raised its gold price forecast to $3,200, as the likelihood of a prolonged global trade war increases. Analysts expect this scenario to prompt investors to buy more of the precious metal. The escalating trade dispute reflects gold's importance as a store of value in uncertain times.

The unexpected rise in gold prices this year has prompted investment banks to revise their gold price forecasts, with at least four banks—Citibank, Goldman Sachs, Macquarie, and RBC—raising their forecasts in recent weeks.

Demand has been boosted by central banks diversifying their investments away from the US dollar. Central banks, particularly in emerging markets, have bought more than 1,000 tons of gold annually for the past three consecutive years. In a related development, markets are awaiting the Federal Open Market Committee's meeting on Tuesday and Wednesday to issue its monetary policy decisions. Expectations are that the central bank will keep interest rates unchanged after cutting them by 100 basis points since September. Markets anticipate a resumption of monetary easing in June, a scenario that would support gold.