Gold Market Stabilizes Amid Slowing U.S. Inflation

Gold prices experienced relative stability in local markets on Saturday, coinciding with the global stock market’s weekend break. This follows a rise at the end of the week, spurred by slowing inflation, which raises hopes for a potential interest rate cut in September.

According to Eng. Saeed Embabi, CEO of "iSagha," an online gold and jewelry trading platform, gold prices have stabilized compared to the end of yesterday’s trading. The price of 21-carat gold remained at 3260 EGP per gram, while the ounce concluded the week at 3287 USD, marking a weekly decline of 13 USD, or 0.5%.

Embabi added that 24-carat gold recorded 3726 EGP per gram, 18-carat gold was at 2794 EGP per gram, and 14-carat gold was priced at 2174 EGP per gram. The price of a gold pound was around 26080 EGP.

Gold prices had risen in local markets by 15 EGP during Friday's trading, with the 21-carat gold opening at 3245 EGP per gram and closing at 3260 EGP. On the global market, gold prices rose by 25 USD, starting the day at 2362 USD per ounce and ending at 2387 USD.

Embabi explained that the Personal Consumption Expenditures (PCE) price index data released on Friday revealed a slowdown in inflation rates, bolstering expectations for a U.S. Federal Reserve interest rate cut in September.

According to the Bureau of Economic Analysis, the headline inflation rate dropped to 2.5% annually last month, down from 2.6% in May. The core PCE index, which excludes volatile food and energy costs, remained steady at 2.6%, slightly above Wall Street’s expectation of 2.5%.

He noted that this data confirmed that the U.S. Federal Reserve’s restrictive monetary policy has achieved its goals, potentially driving inflation down to the 2% target.

The U.S. GDP report for the second quarter, released last Thursday, showed a 2.8% annual increase, surpassing the 2.1% growth rate. This report initially pushed global market prices to their lowest levels before they rebounded with the inflation data released on Friday.

Embabi highlighted that as the Federal Reserve aims to balance taming inflation with supporting economic growth, markets are closely watching for signs of shifts in interest rates. The central bank's actions in the coming months could have far-reaching effects on gold prices.