Gold Prices Decline Following US Manufacturing and Retail Sales Data

Gold prices saw a significant decline on Thursday in both local and global markets after the release of U.S. economic data that tempered hopes for a potential interest rate cut by the Federal Reserve in September.

Saeed Embabi, CEO of the online gold and jewelry trading platform "iSagha," reported that local gold prices dropped by EGP 15 during Thursday’s trading session. The price of 21-karat gold, the most widely traded in Egypt, fell to EGP 3,445 per gram. Meanwhile, on the global market, gold prices decreased by $3 per ounce, bringing the price down to $2,444.

Embabi further detailed the declines across various gold types: 24-karat gold dropped to EGP 3,937 per gram, 18-karat gold fell to EGP 2,953 per gram, and 14-karat gold reached EGP 2,297 per gram. The price of a gold pound (approximately 8 grams of 21-karat gold) decreased to EGP 27,560.

This downward trend in gold prices followed similar declines on Wednesday when the price of 21-karat gold opened at EGP 3,475 per gram and closed at EGP 3,460 per gram. Globally, gold prices dropped by $20 per ounce, starting at $2,467 and ending the session at $2,447.

The recent drop in gold prices was triggered by the release of key U.S. economic data, including manufacturing output, weekly unemployment claims, and July’s retail sales figures. The U.S. Department of Labor reported that new claims for state unemployment benefits reached 227,000 last week, slightly below the anticipated 236,000 claims. The revised figure for the previous week was adjusted to 234,000.

These economic indicators have reduced expectations of a near-term interest rate cut by the Federal Reserve, putting downward pressure on gold prices. Gold, typically viewed as a safe-haven asset during times of economic uncertainty, often decreases in value when interest rates are expected to remain stable or rise. Higher interest rates increase the opportunity cost of holding non-yielding assets like gold, making them less attractive to investors.

As global markets continue to react to the latest U.S. economic data, gold prices may see further fluctuations in the coming days. Investors will be closely monitoring any additional signals from the Federal Reserve regarding its monetary policy stance, as these will likely influence the future direction of gold prices.