Gold prices experienced a notable rebound in local markets today, Tuesday, mirroring gains in the global market. This recovery comes from a drop in U.S. Treasury yields, triggered by lower-than-expected U.S. Producer Price Index (PPI) data. The data, which pointed to easing inflationary pressures, has boosted the value of gold after a sluggish start to the trading day.
Eng. Saeed Imbabi, CEO of the "iSagha" online platform for gold and jewelry trading, reported a 10 EGP increase in local gold prices during today’s session compared to Monday’s closing prices. The price of 21-karat gold now stands at 3,780 EGP per gram. On the global market, the price of gold per ounce rose to $2,469, after dipping to $2,459 earlier in the day.
According to Imbabi, the current price of 24-karat gold is 3,977 EGP per gram, while 18-karat gold is priced at 2,983 EGP per gram. The 14-karat gold trades at 2,320 EGP per gram, and the gold pound has reached 27,840 EGP.
Yesterday, gold prices in local markets saw a 5 EGP increase during trading. The price of 21-karat gold opened at 3,470 EGP per gram and closed at 3,475 EGP. Meanwhile, in global markets, gold prices jumped by $39, with the ounce of gold starting at $2,431 and ending at $2,470.
Imbaby emphasized that the decrease in the PPI suggests a reduction in inflationary pressures. This development strengthens the likelihood that the U.S. Federal Reserve might end its monetary tightening and begin cutting interest rates at its September meeting. Such a move could support a long-term rise in gold prices.
The U.S. Department of Labor recently announced a 0.1% decline in the Producer Price Index for July, following a 0.2% increase in June. Over the past year, core wholesale inflation rose by 2.2%, below the expected 2.6% and down from June’s 2.7%.
The report also noted that the core PPI, excluding volatile food and energy prices, remained flat at 0.0% in July. This was better than the forecasted 0.2% increase, following a downwardly revised 0.3% increase in June. The annual core PPI rate was 2.4%, significantly lower than the expected 3.0% and June’s 3.0%.
The PPI is a crucial indicator of inflation, as it reflects how producers pass on higher input costs to consumers.
Additionally, U.S. Treasury yields dropped, further fueling expectations of a possible interest rate cut—a scenario generally viewed as positive for gold prices, given the inverse relationship between bond yields and gold.
Markets are now focused on the upcoming U.S. inflation data, set to be released tomorrow, Wednesday, which is expected to provide more clarity on the future direction of interest rates.
Follow the latest news on Google News
