Gold Gains 2.5% in Egypt as Global Prices Climb

Gold prices in Egypt’s local markets increased by 2.5% over the past week, while global gold prices saw a 3.3% rise by the end of Friday’s trading session. The surge in international prices is largely attributed to growing expectations that the U.S. Federal Reserve will cut interest rates by as much as 50 basis points.

Saeed Embabi, Executive Director of the "iSagha" platform for online gold and jewelry trading, confirmed that local gold prices have increased by EGP 85 during the past week. The price of 21-karat gold, the most popular type in Egypt, opened at EGP 3,395, peaked at EGP 3,500, and closed the week at EGP 3,480. Globally, the price of an ounce of gold jumped by $82, starting at $2,497, hitting a high of $2,585, and settling at $2,579.

Embabi also provided a breakdown of other gold prices in Egypt: 24-karat gold reached EGP 3,977 per gram, 18-karat gold was priced at EGP 2,983, and 14-karat gold stood at EGP 2,320. Additionally, a gold pound was priced at EGP 27,840.

Gold prices remained steady in local markets on Saturday, as global markets were closed for the weekend. The price of 21-karat gold held at EGP 3,480.

He further explained that local gold prices are currently EGP 51 below global prices, based on the international ounce price and the official U.S. dollar exchange rate at the Central Bank of Egypt. He noted that the fair price for a gram of 24-karat gold should be around EGP 4,022.

A decline in local demand, with many individuals selling gold for liquidity, alongside the export of raw gold, has caused the local market to diverge from global trends, resulting in lower domestic prices.

Gold has seen significant gains this year, rising by $517, or 25%, since January. These gains are driven by strong purchases from central banks, expectations of an end to monetary tightening, and growing demand for gold as a safe-haven asset amid escalating conflicts in the Middle East. Individual investors have also contributed to this rising demand.

Embabi suggested that the recent increase in prices, ahead of the U.S. Federal Reserve's upcoming meeting, may be speculative. A potential interest rate cut could lead to a drop in gold prices, but they may continue to rise due to ongoing geopolitical tensions, particularly between Russia and Ukraine, and the conflict between Israel and Palestine.