Gold Loses EGP 190 in Local Markets Over the Week

Gold prices saw a significant decline in local markets over the past week, dropping by nearly 4%, as demand weakened following a trade agreement between Washington and Beijing. international gold prices also dropped by 2.8% during the same period.

Saeed Embabi, Executive Director of iSagha—an online platform for trading gold and jewelry—stated that local gold prices dropped by EGP 190 per gram last week. Gold of 21-karat purity opened trading at EGP 4,800 and closed at EGP 4,610. On the global front, gold lost $95 per ounce, falling from $3,369 to $3,274.

Embabi added that:

24-karat gold recorded EGP 5,269 per gram,

18-karat gold stood at EGP 3,951,

14-karat gold reached EGP 3,074,

And the gold pound (8 grams of 21-karat) stood at EGP 36,880.

Gold prices also dropped EGP 15 on Saturday alone, opening at EGP 4,625 per gram (21-karat) and closing at EGP 4,610, coinciding with the global market’s weekend closure.

Despite traditionally supportive conditions for gold—such as a weakening U.S. dollar and growing expectations of interest rate cuts—Embabi noted that these factors were overshadowed by a wave of investor appetite for high-yield assets, which pressured gold prices downward.

Market Optimism Dampens Gold’s Appeal

Markets were buoyed by positive developments on both the trade and geopolitical fronts, which contributed to diminishing traditional safe-haven demand for gold. A formal trade agreement was signed between the U.S. and China, with Washington signaling that more deals could follow before July 9, suggesting a potential breakthrough in global economic relations.

Further boosting sentiment, China announced its readiness to expedite exports of rare earth metals to the U.S.—a rare gesture of cooperation amid previous tensions.

On the geopolitical front, Iran showed renewed diplomatic flexibility toward the U.S., and media reports indicated that the war between Israel and Gaza could end within two weeks. These developments helped ease geopolitical risk premiums that had previously supported gold prices.

Embabi emphasized that the geopolitical calm allowed investors to book profits after months of positioning based on potential escalations involving China or the Middle East.

Gold Misses Out Despite Dollar Weakness

Despite a 1.32% drop in the U.S. dollar index and stable Treasury yields, gold failed to capitalize. Embabi attributed this to the strong performance in equity markets, which signaled a shift in investor preference toward growth assets, leaving gold under pressure.

While gold was already weighed down by easing geopolitical tensions, it was the hot U.S. inflation data that dealt the final blow. Core Personal Consumption Expenditures (PCE) inflation rose to 2.7% in May, above the Federal Reserve’s 2% target, while personal income fell by 0.4%.

This surge in inflation crushed any lingering hopes for aggressive Fed rate cuts. As Treasury yields climbed and the dollar strengthened, gold prices came under further selling pressure.

Gold’s Role Re-Evaluated Amid New Market Realities

Gold is currently navigating a sensitive phase, with many of its traditional drivers—like geopolitical crises and monetary easing—fading. As equity markets climb and global tensions stabilize, investors appear to be reassessing asset allocations, moving away from safe-havens like gold, at least in the near term.

Focus Shifts to Upcoming U.S. Labor Market Data

Looking ahead, market attention is turning to a data-heavy week, with a focus on the U.S. labor market—considered a key gauge for the Federal Reserve’s future monetary policy path.

On Tuesday, markets await the ISM Manufacturing PMI and the JOLTS job openings report, both providing insight into industrial activity and labor demand.

Wednesday will feature the ADP private payrolls report, often viewed as a precursor to the official employment figures.

The climax comes on Thursday, with the release of the Non-Farm Payrolls (NFP), weekly jobless claims, and the ISM Services PMI, all expected to provide critical signals for markets navigating a complex economic landscape.