Gold Records Biggest Weekly Loss Amid Federal Reserve Policy Signals

Gold prices saw a modest recovery in local markets on Saturday, with global markets closed for the weekend.

This followed one of the steepest weekly losses for gold since June 2021, spurred by a surging U.S. dollar and waning expectations for interest rate cuts after Federal Reserve Chair Jerome Powell reiterated a cautious, gradual approach to monetary policy adjustments.

Saeed Embabi, CEO of the online gold trading platform iSagha, reported a slight increase of 5 EGP in local gold prices, bringing the price of 21-karat gold, the most popular in Egypt, to 3,550 EGP per gram. Globally, gold prices ended the week at $2,684 per ounce, marking a sharp $121 drop, equivalent to a 4.5% decline over the week.

Other local gold prices also reflected a slight uptick. A gram of 24-karat gold rose to 4,057 EGP, while 18-karat gold was priced at 3,043 EGP and 14-karat gold at 2,367 EGP. The gold pound coin was valued at 28,400 EGP. Despite Saturday’s gains, the broader trend reflects a challenging week for the gold market.

Gold’s global performance suffered significantly, with the commodity touching a two-month low of $2,536 per ounce earlier in the week. Powell’s firm stance on maintaining higher interest rates to control inflation strengthened the dollar, which in turn pressured gold prices downward. Gold’s losses highlight its inverse relationship with the dollar and bond yields, both of which rose sharply following Powell’s remarks.

Although the dollar and U.S. Treasury yields eased slightly toward the end of the week, limiting further losses for gold, the outlook remains uncertain. Positive economic data, including growth in U.S. retail sales and industrial production for October, added to market volatility. While retail sales grew annually and monthly, the latter saw a slight dip compared to September, signaling mixed signals about the U.S. economy’s resilience.