Gold Prices Rise 2% Amid Global Geopolitical Tensions

Gold prices experienced a notable increase of 2% in the global market this past week, rising by $48 to close on Friday. This uptick is primarily driven by escalating geopolitical tensions in the Middle East, contributing to heightened investor uncertainty about the direction of U.S. interest rates, which in turn has boosted the appeal of gold as a safe haven asset.

Saeed Embabi, Executive Director of the online gold and jewelry trading platform "iSagha," reported that despite global fluctuations, gold prices remained stable in local markets during the weekend when the global exchange was closed. At the close of the week, the price per gram of 21-karat gold stood at 3,265 Egyptian pounds, aligning with the global ounce price which settled at $2,391 after reaching highs of $2,410 amid responses to an Iranian strike by Israel.

Detailing further, Embabi noted that the price for a gram of 24-karat gold reached 3,731 Egyptian pounds, 18-karat at 2,799 pounds, and 14-karat at 2,177 pounds. The gold pound (an eight-gram unit) was priced at 26,120 pounds. The price increase from the previous day was notable, with 21-karat gold climbing from 3,250 to 3,265 pounds, and the global ounce value rising by $20 from an opening of $2,371 to closing at $2,391.

Embabi emphasized that local gold prices closely track global market trends due to Egypt's significant raw gold exports aimed at generating foreign currency and enhancing market liquidity. This strategic exportation has been a key means of acquiring dollars, prompting the Egyptian Central Bank previously to oppose a Ministry of Finance initiative that imposed an appraisal fee on raw gold, which had affected exports and dollar availability.

He predicted that the continuous export of raw gold would likely reduce local market supply, particularly in light of the ongoing suspension of imports since March 2022. With escalating tensions in the Middle East, Embabi forecasts that gold prices may continue to rise if demand increases, driven by the metal's reputation as a safe investment during geopolitical uncertainties.