Gold prices drop by EGP 35 in local markets in a week

Gold prices in local markets fell by 0.8% during trading in the week ending Saturday evening, while the ounce on the global stock exchange fell by 1.5% during trading in the week ending Friday evening, driven by heavy profit-taking in the search for liquidity and declining bets on interest rate cuts.

 Saeed Imbaby, CEO of the online gold and jewelry trading platform "iSaaga," said that gold prices in local markets fell by about EGP 35 during last week's trading. The price of a gram of 21-karat gold opened at EGP 4,385, reached EGP 4,445, and closed at EGP 4,350. Meanwhile, the price of an ounce on the global stock exchange fell by $47, opening at $3,085 and reaching its all-time high of $3,168 on Thursday, April 3, before closing at $3,038. Imbaby added that a gram of 24-karat gold reached EGP 4,971, a gram of 18-karat gold reached EGP 3,729, a gram of 14-karat gold reached EGP 2,900, and a gram of gold reached EGP 34,800. According to the daily report of the "iSaaga" platform, gold prices in local markets fell by about 25 pounds during trading yesterday, Saturday. The price of a gram of 21-karat gold opened at 4,375 pounds and closed at 4,350 pounds, coinciding with the weekly global stock exchange holiday.

Imbabi explained that gold prices in local markets are about 30 pounds higher than global markets, after the price gap in yesterday's trading reached 61 pounds.

He added that local gold prices did not decline with the decline in ounces on the global stock exchange, amid a desire by raw gold traders to capitalize on price differences due to potential demand from the retail sector following the end of the Eid al-Fitr holiday.

He added that gold prices in recent months have been lower than the price on the global stock exchange, due to declining demand and the local market's shift toward exporting to secure liquidity due to intensive resale operations. Imbaby pointed out that jewelry manufacturers are continuing to reduce weights to overcome the sharp decline in demand resulting from the decline in citizens' purchasing power, especially with gold prices reaching record highs.

He added that consumer finance companies have tried to play a role in stimulating sales by offering gold installments, but the high interest rate of approximately 30% of the price of gold has pushed citizens away from these companies, especially given the incidence of defaults and the risk of imprisonment for dealers.

Imbaby noted the interest of citizens and those seeking to invest in silver bullion as a hedge against the unprecedented rise in the price of the yellow metal.

Imbaby advised low-income citizens, as well as young people, to purchase a silver pound, which ranges between 500 and 600 Egyptian pounds, depending on the karat. Gold prices rose in local markets by 18%, reaching EGP 680 during the first quarter of 2025, while they rose on the global stock exchange by 19%, reaching $502. Gold also recorded its best quarterly performance in 39 years, supported by purchases from central banks, inflows from exchange-traded funds, and safe-haven demand.

Imbaby noted that the comprehensive tariffs announced by US President Donald Trump have destabilized global trade, amid fears of a global economic recession.

He added that gold remains capable of fulfilling its role as a hedge, as despite its weekly decline, it continues to outperform stock markets. He noted that the sharp decline in gold prices came after the ounce reached an all-time high, driven by safe-haven flows, following President Trump's announcement of sweeping new tariffs. China's retaliatory 34% tariffs on US goods exacerbated fears of a global recession. When stocks collapsed, investors turned to gold for liquidity, and forced selling spread to precious metals, halting gold's rally.

The US Federal Reserve Chairman indicated that tariffs could re-accelerate inflation, dampening bets on interest rate cuts and negatively impacting gold prices.

Federal Reserve Chairman Jerome Powell warned that inflation could rise again due to the broad tariffs imposed by President Donald Trump, indicating the possibility of it remaining at elevated levels for an extended period.

Powell said in press statements: "We face a highly uncertain economic outlook, with elevated risks related to increased unemployment and inflation. While tariffs are likely to lead to a temporary spike in inflation, their effects could also be more lasting."

Imbaby explained that US tariffs and the escalating trade war they sparked have led to the largest disruption to the global supply chain since the world was forced to shut down due to the COVID-19 pandemic and represent the largest disruption to global trade in 100 years.

He added that stock markets have experienced sharp declines as investors are forced to reduce their investments in the face of slowing economic activity and rising inflation.

He pointed out that the factors that pushed gold prices above $3,000 per ounce remain in place. Continued uncertainty, trade wars, central bank policies, and geopolitical risks are all supporting factors. The weakness in US stock markets will also support gold as an important risk hedge.

In a related development, markets are awaiting the minutes of the Federal Open Market Committee's March meeting on Wednesday, the US Consumer Price Index on Thursday, and the US Producer Price Index on Friday.