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Local Gold Prices Rise as Global Market Sees 0.6% Decline


Gold Prices

Sat 22 Jun 2024 | 09:12 PM
Waleed Farouk

Gold prices on the global market fell by 0.6% in the trading week that ended last Friday, influenced by the Purchasing Managers' Index (PMI) data following a relatively calm week.

According to Saeed Embabi, the CEO of the online gold and jewelry trading platform "iSagha," local gold prices in Egypt rose by 5 EGP today compared to the end of yesterday's trading. This increase coincides with the weekly closure of the global stock exchange, with gold closing at $2,320 per ounce for the week.

Embabi reported that the price of 24-carat gold reached 3,589 EGP per gram, while 21-carat gold stood at 3,140 EGP per gram. Additionally, 18-carat gold was priced at 2,692 EGP per gram, 14-carat gold at 2,094 EGP per gram, and a gold pound at 25,120 EGP.

Embabi noted that gold prices on the global exchange began the week at $2,333 per ounce, dropped to a weekly low of $2,307 on Tuesday, hit a weekly high of $2,368 on Thursday, and ended the week at $2,320 per ounce.

Gold's previous gains were trimmed on Friday following the release of the U.S. PMI data, which showed an increase in the Global Manufacturing PMI to 51.7 in June from 51.3 in May, and a rise in the Services PMI to 55.1 from 48.3 previously. Both results surpassed analysts' expectations.

Embabi highlighted that the increase in PMIs suggests inflation is likely to remain high, which could lead the U.S. Federal Reserve to delay cutting interest rates.

He explained that central bank purchases represent another path for gold in the face of rising interest rates. According to a survey of international central bank reserve managers by the World Gold Council, 81% of participants believe central banks will increase their reserves in 2024, the highest percentage since the survey began in 2019.

Embabi added that central bank gold purchases are used as a hedge against a rising dollar. The U.S. Federal Reserve has revised its interest rate cut expectations from three to one in 2024, as countries seek to break the dollar's dominance, preventing it from being used as a sanction weapon.

In related news, markets are watching for updates on the Chinese central bank's potential resumption of gold purchases, along with U.S. inflation and employment data due this week. Additionally, speeches by U.S. Federal Reserve officials on Monday, Tuesday, and Friday are expected to provide clear indications on the timing of the anticipated interest rate cuts.