Gold Prices Drop as Dollar Hits Four-Month High

Gold prices in Egypt’s local market took a significant hit on Monday, with a decline of EGP 50 per gram, reflecting global trends influenced by the dollar’s rise and intensified market selling.

The recent pressure on gold prices is tied to the optimism surrounding expansive economic policies expected under U.S. President-elect Donald Trump, which has buoyed the dollar and caused investors to pull back from gold.

According to Saeed Imbaby, CEO of the gold trading platform iSagha, 21-karat gold currently stands at EGP 3,710 per gram in Egypt. Meanwhile, the international price of gold dropped by $24 per ounce, settling at $2,660.

Imbaby noted that the 24-karat gold price in Egypt is now at EGP 4,240 per gram, 18-karat at EGP 3,180, 14-karat at EGP 2,474, and the gold pound at EGP 29,680.

Despite a modest decrease last week, gold prices remain under pressure, having dropped 0.3% over the week in Egypt and 1.9% in global markets. Rising U.S. Treasury yields, fueled by expectations for Trump’s policies, have continued to make the dollar more attractive to investors, contributing to gold’s largest weekly loss in over five months.

Investors are closely monitoring Trump’s potential trade policies, including a proposed 10% tariff on all imports, which could spark inflationary pressure and limit the Federal Reserve’s ability to ease monetary policy. Such inflationary expectations have further boosted U.S. Treasury yields, reducing demand for gold as a safe asset.

Imbaby pointed out that although the dollar’s strength and market caution have kept gold prices suppressed, global uncertainty may create a counterbalancing effect.

As investors wait for key economic data and statements from the U.S. Federal Reserve this week, there is widespread anticipation regarding the trajectory of interest rates, which could further impact gold prices.

Last week, the U.S. Federal Reserve reduced its benchmark rate by 25 basis points and hinted at possible future rate cuts, with markets predicting a 65% chance of another rate reduction in December.

Federal Reserve officials, including Minneapolis Fed President Neel Kashkari, emphasized the need for more evidence of inflation reaching the Fed’s 2% target before proceeding with additional rate cuts.