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Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Weak Dollar and Rate Cut Expectations Boost Gold Prices


Gold Service

Thu 06 Jun 2024 | 10:11 PM
Waleed Farouk

Gold prices in local markets surged in mid-trading on Thursday, driven by a weak dollar and rising expectations of a rate cut by the U.S. Federal Reserve. Markets are eagerly awaiting the release of U.S. employment data on Friday.

Saeed Imbabi, CEO of the online gold and jewelry trading platform "iSagha," reported that local gold prices increased by 15 EGP today compared to the end of yesterday's trading. The price of 21-karat gold reached 3,140 EGP per gram, while an ounce of gold in the global market rose by $3, reaching $2,358.

Imbabi added that the price of 24-karat gold is now 3,589 EGP per gram, 18-karat gold is priced at 2,691 EGP per gram, and 14-karat gold stands at 2,094 EGP per gram. Additionally, the price of a gold pound is now 25,120 EGP.

On Wednesday, local gold prices rose by 25 EGP, with 21-karat gold starting at 3,100 EGP per gram and closing at 3,125 EGP. Globally, gold prices increased by $12, with an ounce opening at $2,335 and closing at $2,355.

Despite the rise in global gold prices, Imbaby noted that the local market is moving more slowly. This lag is due to raw gold traders pressuring prices down to achieve profit margins from exports amid weak local demand.

He emphasized that gold remains the safest tool for preserving the value of money, though it is a long-term investment. The current lack of trust and reluctance among citizens to buy gold stems from market instability over the past two years, with gold being overpriced and unfair price declarations.

Imbabi explained that market stability will eventually lead citizens back to buying gold, though with less enthusiasm. They will likely focus on purchasing jewelry for weddings, adornment, and savings. The previous rush to buy gold is unlikely to happen again, as consumers fear artificial price hikes. Local consumers also tend to exhibit flawed purchasing behaviors, buying when prices rise and causing market stagnation when prices calm or decline.

In related news, U.S. economic data released on Wednesday strengthened expectations that the Federal Reserve will cut interest rates later this year. Reports indicated that private sector employment in the U.S. increased by 152,000 jobs in May, down from 173,000 jobs in the previous month, further signaling a slowdown in the labor market.