Gold Prices Drop by EGP 50 in Local Markets Over the Week

Gold prices in Egypt’s local markets fell by EGP 50 last week, marking a 1.5% decline, while global gold prices dropped by 0.2% by the end of trading on Friday. This decrease was driven by heavy profit-taking in response to new economic data that dampened hopes of a U.S. Federal Reserve interest rate cut.

Saeed Embabi, CEO of the online gold trading platform iSagha, stated that 21-karat gold, the most traded in Egypt, opened the week at EGP 3,445 per gram and closed at EGP 3,395 per gram. Globally, gold prices also saw a decline, with the price per ounce dropping by $6, starting and ending the week at $2,503.

Embabi also provided prices for other gold types: 24-karat gold was priced at EGP 3,880 per gram, 18-karat gold at EGP 2,910 per gram, and 14-karat gold at EGP 2,264 per gram. The price of a gold pound was recorded at EGP 27,160.

Gold prices in local markets remained steady on Saturday, with 21-karat gold holding at EGP 3,395 per gram, coinciding with the weekend break in global trading.

Last week saw significant selling pressure in the global gold market as investors cashed in on profits, driving the price per ounce below $2,500. Gold futures on the COMEX closed at $2,526 per ounce, while spot prices settled at $2,497 per ounce.

Embabi noted that a mixed U.S. labor report released during the week raised doubts about an imminent Federal Reserve interest rate cut, contributing to the decline in gold prices. The expectation of lower interest rates generally supports gold, as it makes holding the metal more attractive relative to other investments. However, the recent economic data has cast uncertainty on the likelihood of rate cuts, putting downward pressure on global gold prices.

The U.S. labor market report showed an increase of 142,000 non-farm jobs in August, below the forecasted 160,000, signaling a slowdown in hiring. Additionally, job numbers from July were revised sharply downward to 89,000. This weaker-than-expected data has raised concerns about the strength of the U.S. economy and added complexity to the Federal Reserve's decision-making process regarding interest rates.

Looking ahead, the upcoming Federal Reserve meeting on September 18 will be closely monitored by investors. Any decisions on interest rate adjustments could significantly impact gold prices. Embabi pointed out that market expectations are leaning toward a 25 basis point rate cut, which could stabilize gold prices globally.

The recent drop in gold prices follows a period of record highs, but as economic data continues to evolve, the market remains uncertain. Global gold prices may fluctuate based on the Federal Reserve’s decisions and ongoing economic developments, particularly in the U.S.