Gold Loses EGP 155 Since the Beginning of May Under Pressure from the Dollar and U.S. Treasury Yields

Gold prices in local markets and global exchanges declined during Wednesday’s trading session, hitting their lowest levels in nearly two months, pressured by the strength of the U.S. dollar and rising U.S. Treasury yields, amid continued geopolitical uncertainty surrounding U.S.-Iran negotiations, according to a report issued by the Marsad Al Dahab for Economic Studies.

The report stated that local gold prices fell by around EGP 5 compared to Tuesday’s closing levels, with 21-karat gold recording EGP 6,800 per gram, while global gold prices declined by nearly $9, with the ounce trading at $4,492, according to data from the World Gold Council at the time of publication.

It added that 24-karat gold recorded approximately EGP 7,771 per gram, while 18-karat gold reached EGP 5,829 per gram, and the gold sovereign stood at around EGP 54,400.

The report noted that gold prices had already fallen by around EGP 65 during Tuesday’s trading, as 21-karat gold opened at EGP 6,870 and closed at EGP 6,805, while the global ounce dropped by nearly $78 after opening at $4,561 and ending the session at $4,483.

According to the report, local gold prices have lost around EGP 155 since the beginning of May, after 21-karat gold opened the month at EGP 6,955 per gram, while the global ounce declined by approximately $125 after starting the month at $4,617.

The report also pointed out that local gold prices have fallen by nearly EGP 800 from their all-time high of EGP 7,600 recorded on March 2, 2026, while the global ounce has dropped by around $1,134 from its record peak of $5,626 reached on January 29, 2026.

Despite the recent declines, gold still maintains annual gains since the beginning of the year, with local prices rising by nearly EGP 970 compared to the year-opening level of EGP 5,830, while the global ounce has gained around $174 after opening the year at $4,318.

Globally, gold prices extended losses for a second consecutive session on Wednesday, weighed down by continued strength in the U.S. dollar and rising Treasury yields, which reduced the appeal of the precious metal despite ongoing geopolitical tensions in the Middle East.

The U.S. dollar continues to receive strong support from growing concerns over U.S. inflation and increasing market expectations that the Federal Reserve will maintain a tighter monetary policy for a longer period. This has boosted demand for the dollar and weakened investment demand for gold, which is considered a non-yielding asset.

Recent U.S. inflation data came in above expectations, pushing Treasury yields sharply higher and reducing expectations for interest rate cuts this year, while also increasing the likelihood that rates will remain elevated for longer. According to CME Group data, most traders expect the Federal Reserve to keep interest rates unchanged at its upcoming June meeting.

Higher interest rates increase the attractiveness of yield-bearing assets, particularly U.S. Treasuries, raising the opportunity cost of holding gold. In addition, the stronger dollar makes gold more expensive for holders of other currencies, placing further pressure on global demand, especially in Asian and European markets.

At the same time, investors are awaiting the release of the Federal Reserve meeting minutes later today for clearer signals regarding the future direction of monetary policy amid persistent inflationary pressures and rising expectations that restrictive policy will remain in place for longer.

On the geopolitical front, markets continue to deal cautiously with developments surrounding Iran amid mixed signals from U.S. officials regarding the prospects of reaching an agreement. Recent remarks by U.S. President Donald Trump expressing confidence in a swift resolution of the crisis helped ease market fears to some extent, while Vice President J.D. Vance indicated progress in ongoing talks between Washington and Tehran.

These developments coincided with reports suggesting that any large-scale U.S. military action had been postponed to allow additional time for mediation efforts. However, uncertainty remains elevated due to continued difficulties in negotiations and reports of attacks targeting energy facilities in the Gulf region, keeping markets on alert.

In addition to monetary and geopolitical pressures, gold also faced further downside pressure from physical demand and investment flows after India raised gold import duties from 6% to 15%, a move aimed at protecting foreign exchange reserves but likely to reduce demand from one of the world’s largest gold-consuming markets.

Data also showed that holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, declined by around two metric tons, bringing total holdings to their lowest level in a week, reflecting continued selling pressure on the yellow metal.

Markets are expected to remain highly volatile in the coming days as investors await a series of important U.S. economic data releases, including jobless claims, PMI indicators, and inflation expectations data, while gold continues to face mounting pressure from the strong dollar, rising Treasury yields, and the persistence of restrictive monetary policy.