Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Gold Prices Decline Amid Strong Dollar and Renewed Hopes for US Interest Rate Cuts

Gold Prices

Tue 07 May 2024 | 05:57 PM
Waleed Farouk

On Tuesday, gold prices saw a modest decline in local markets, amidst a strong dollar and investor profit-taking, though they remain near their recent highs due to ongoing geopolitical tensions and economic uncertainties. Globally, the price of gold per ounce fell by $13 to $2312, mirroring the local market trends.

Saeed Embabi, Executive Director of the online platform "iSagha," detailed the day's price movements in the Egyptian market. According to Embabi, the price of a 21-karat gold gram decreased by EGP 10 to EGP 3090. He also noted that prices for other karats stood at EGP 3531 for 24-karat, EGP 2649 for 18-karat, and EGP 2060 for 14-karat, with a gold pound priced at EGP 24720.

Embabi highlighted that the local market saw slight fluctuations throughout the past week. The price for 21-karat gold began the week at 3100 pounds, dipped to 3085 pounds, and closed back at 3100 pounds by week's end. In contrast, the global market displayed more pronounced changes with the ounce price opening at $2301 and closing at $2325, marking a $24 increase over the week.

The fluctuations in gold prices come amidst renewed expectations for a cut in US interest rates following weaker-than-anticipated non-farm payroll data. The US labor market reported the addition of only 175,000 new jobs in April, significantly below the forecasted 243,000, and a sharp decline from the 315,000 jobs added in March. This underperformance has led to market speculations about a potential 25 basis-point rate cut by the US Federal Reserve in September, with a further quarter-point reduction expected by the end of the year.

Lower interest rates tend to make gold, a non-yielding asset, more attractive as they reduce the opportunity cost of holding it compared to yield-bearing investments. The outcome of ongoing Israeli-Palestinian peace talks could also influence gold prices, as geopolitical stability tends to affect market sentiment.