Marsad Al Dahab reported that gold prices continued to decline in both the Egyptian local market and global bullion markets during Friday's trading session, pressured by the U.S. Federal Reserve's commitment to a hawkish monetary policy, the strengthening U.S. dollar, and easing geopolitical tensions following the temporary ceasefire between the United States and Iran. The decline in oil prices further weakened demand for gold as a safe-haven asset.
The continued strength of the Egyptian pound against the U.S. dollar also added downward pressure on domestic gold prices, supported by stronger foreign currency inflows and lower global energy prices, reducing the local pricing cost of the precious metal.
The price of 21-karat gold, the benchmark in the Egyptian market, fell by EGP 105 during Friday's trading to around EGP 5,980 per gram, while spot gold dropped by approximately $76 to around $4,142 per ounce at the time of writing.
Meanwhile, 24-karat gold traded at approximately EGP 6,834 per gram, 18-karat gold at EGP 5,126, and the gold sovereign at around EGP 47,840.
The report noted that gold prices had already declined during Thursday's session, with 21-karat gold opening at EGP 6,140 before closing at EGP 6,085 per gram, while the global gold price fell from $4,261 to $4,218 per ounce.
Marsad Al Dahab indicated that the Egyptian market continues to trade at a premium of nearly EGP 200 above the fair price based on international gold prices and the exchange rate, supported by sustained demand for gold bars and coins, as well as precautionary buying by some traders amid heightened market volatility.
The report added that the current correction represents one of the sharpest declines since the beginning of June. The price of 21-karat gold has fallen by approximately EGP 785 after opening the month at EGP 6,765 per gram, while the global gold price has dropped by nearly $398 per ounce from around $4,540 at the start of June to approximately $4,142.
As a result, gold's gains in the Egyptian market since the beginning of 2026 have narrowed to just EGP 150 per gram, or about 2.7%, after peaking at nearly EGP 1,770 on March 2. This leaves the market on the verge of erasing all of its gains for the year should the current downward trend continue. Globally, gold has lost around $176 per ounce since the start of the year, equivalent to roughly 4%.
Markets also repriced expectations following the latest Federal Reserve meeting, where policymakers kept interest rates unchanged but maintained a hawkish tone, emphasizing persistent inflationary pressures and signaling no urgency to cut rates. This strengthened the U.S. dollar and pushed Treasury yields higher, increasing pressure on non-yielding assets such as gold.
In addition, stronger-than-expected manufacturing data from the Federal Reserve Bank of Philadelphia reinforced confidence in the resilience of the U.S. economy and reduced expectations of an imminent interest rate cut, adding further selling pressure to bullion prices.
On the domestic front, the strengthening Egyptian pound has become one of the main factors weighing on local gold prices. The average exchange rate has fallen below EGP 50 per U.S. dollar, supported by lower oil prices, record remittances from Egyptians abroad totaling $39.2 billion between July 2025 and April 2026, improved foreign currency liquidity, and renewed foreign investment in Egypt's local debt market.
Diverging Demand Across Major Gold Markets
Physical gold demand showed mixed trends across the world's two largest consumer markets.
In India, lower prices encouraged a gradual return of buyers, although elevated volatility continued to keep many consumers cautious. Jewelers also began rebuilding inventories ahead of the upcoming seasonal demand period, while gold-backed exchange-traded funds recorded their first monthly outflows in more than a year as investors took profits following record price gains.
In China, gold premiums turned into discounts for the first time in several months, reflecting softer physical demand as investors awaited greater clarity on U.S. monetary policy and geopolitical developments. Traders in Shanghai also reported subdued investment demand, highlighting the cautious sentiment prevailing across Asia's largest gold markets.
Dubai to Launch Same-Day Gold Futures Contracts
Meanwhile, global financial markets continue expanding investment products linked to gold. Starting next Monday, the Dubai Gold & Commodities Exchange (DGCX) will launch new same-day settlement gold futures contracts aimed at improving liquidity, accelerating trade execution, and enhancing market efficiency, underscoring continued institutional confidence in the precious metal despite the ongoing price correction.
Marsad Al Dahab believes that financial markets have shifted from pricing geopolitical risks to pricing U.S. monetary policy, making the U.S. dollar and Treasury yields the dominant drivers of gold prices in the current environment. At the same time, the stronger Egyptian pound and lower oil prices have intensified downward pressure on domestic prices. Nevertheless, demand indicators from India and China, together with continued innovation in global gold trading infrastructure, reaffirm gold's position as a strategic long-term asset despite ongoing short-term volatility.
Follow the latest news on Google News
