Gold prices rise by EGP 90 in local markets over the course of a week

Gold prices rose by 2.1% in the local market during trading last week, ending Saturday evening. The global ounce rose by 2.6% during trading last Friday evening, due to increased demand for safe havens amid expectations of a US Federal Reserve rate cut and trade war concerns.

Gold prices rose by about EGP 90 in local markets during trading last week, with the price of 21-karat gold opening at EGP 4,120, reaching EGP 4,225, and closing at EGP 4,210. Meanwhile, the global ounce rose by $75, opening at $2,910 and reaching $3,004 on Friday, March 14, its highest level in history. Trading ended at $2,985.

The price of a gram of 24-karat gold reached EGP 4,811, while the price of a gram of 18-karat gold reached EGP 3,609. The price of a gram of 14-karat gold reached EGP 2,807, and the gold pound reached EGP 33,680.

Gold prices in local markets rose by 13%, or EGP 470, over two and a half months, despite a sharp decline in demand.

The price of a gram of 21-karat gold opened the year at EGP 3,740, while local gold prices had risen by approximately EGP 565 in 2024.

The markets have witnessed a sharp decline in sales in recent periods, particularly with the increase in resales. This was due to citizens' search for liquidity after a large segment of them converted their savings and money into gold to hedge against the currency's decline.

The rise in gold prices to record levels affected sales and prompted citizens to sell their holdings to benefit from the prices. Economic uncertainty in the United States, along with continued weakness in consumer confidence and rising inflation expectations, highlights the growing threat of a stagflation's environment. High levels of uncertainty surrounding economic policies and conditions, coupled with frequent fluctuations in economic policy, make it difficult for consumers to plan for the future.

The US dollar's decline to a four-month low has made gold more attractive to investors.

Gold prices have risen 14% on the global stock exchange, or $361, since the beginning of the year, with trading opening at $2,624 per ounce.

The continued uncertainty surrounding US President Donald Trump's trade policies has raised fears of a global trade war, which could lead to increased inflation and an economic slowdown in the United States and abroad. This has caused a decline in the dollar and US stocks, enhancing the appeal of gold.

Trade tensions have played a major role in gold's recent surge, with the United States recently imposing new 25% tariffs on imports from Mexico and Canada, along with increased tariffs on Chinese goods. Gold prices surged during the financial crisis, when they surpassed $1,000 per ounce in March 2008. During the COVID-19 pandemic, prices reached $2,000 in August 2020, according to a Bloomberg report.

Fears that Trump might impose tariffs on precious metals prompted US investors to withdraw large amounts from international gold markets, with inventories on the Comex exchange reaching record levels.

Meanwhile, the unexpected rise in gold prices this year has prompted investment banks to revise their 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.

All the long-term drivers of gold prices remain in place, but in the near term, prices may be subject to a decline due to profit-taking, as every rise is followed by a fall.

In a related development, markets are awaiting the US Federal Reserve's decision on interest rates next week, along with the retail sales report and housing data.