Gold Loses EGP 80 in the Local Market Within a Week

Gold prices in the Egyptian market recorded a notable decline over the past week, weighed down by the drop in global bullion prices amid ongoing political and economic uncertainty.

Local gold prices fell by 1.7%, equivalent to EGP 80 for 21-karat gold, slipping from EGP 4,620 to EGP 4,540 per gram. On the global stage, spot gold retreated by 1.8%, falling from $3,397 to $3,336 per ounce.

The price of 24-karat gold reached EGP 5,189 per gram, while 18-karat gold stood at EGP 3,891, and 14-karat gold recorded EGP 3,027. The gold pound (8 grams of 21-karat) was priced at approximately EGP 36,320.

The decline of the U.S. dollar against the Egyptian pound was the main driver of lower gold prices. Analysts explained that every EGP 1 movement in the exchange rate translates into about EGP 50 per gram in local gold prices, while a $10 change in global ounce prices has a far smaller effect of around EGP 6 per gram in the local market.

Gold sales have seen a relative slowdown in recent weeks due to weaker purchasing power, while resale activity has increased as citizens sought liquidity, pushing some traders to shift towards exporting raw gold.

Egyptian Pound and U.S. Dollar: A Year of Volatility

The year 2025 witnessed sharp fluctuations in the exchange rate. The dollar surged beyond EGP 51.7 in April under pressure from inflation and weak foreign inflows, before retreating to around EGP 48 in August following reform measures backed by the International Monetary Fund and Gulf investments that bolstered Egypt’s foreign reserves.

Since the beginning of the year, gold prices in Egypt have risen by EGP 800, an increase of 21.4%, while global bullion prices have climbed by $712, or 27% during the same period.

Global Market: A Turbulent Week

Internationally, gold logged its steepest weekly drop since June, pressured by mixed U.S. economic data and conflicting statements on potential tariffs on bullion. The week began with heavy selling after U.S. authorities clarified tariff measures on gold, before weaker-than-expected inflation (CPI) data on Tuesday gave the metal some relief by bolstering bets on a September rate cut. However, stronger-than-expected Producer Price Index (PPI) data on Thursday reignited fears of persistent inflationary pressures and weakened expectations of an imminent Federal Reserve easing.

The Fed and the Dollar

The U.S. dollar index slipped 0.37% to 97.83 points, weighed down by weaker consumer confidence and higher inflation expectations. Rising U.S. Treasury yields, however, capped gold’s gains. The CME FedWatch tool showed that markets priced in a 95% chance of a 25-basis-point rate cut in September, while expectations for a larger 50-basis-point cut diminished following the latest inflation data.

Geopolitical Scene: A Summit Without Results

On the political front, the highly anticipated summit between U.S. President Donald Trump and Russian President Vladimir Putin in Alaska ended without an agreement to halt the war in Ukraine, despite being described as “constructive.” The geopolitical uncertainty continues to act as a key support for gold’s safe-haven appeal, alongside expectations of a more dovish U.S. monetary policy.

Outlook

Analysts at ANZ Bank expect economic and geopolitical risks to intensify in the second half of 2025, which could boost gold’s attractiveness as a safe-haven asset. They noted that the bullish trend for gold remains intact, underpinned by the likelihood of new tariffs, slowing global growth, and a more flexible Federal Reserve stance.

Markets now await a string of critical U.S. economic indicators next week, including building permits and housing starts (Tuesday), the Fed’s July meeting minutes, speeches by several policymakers, the kickoff of the Jackson Hole symposium (Wednesday), the Philadelphia Fed manufacturing index, jobless claims, preliminary PMI readings, existing home sales (Thursday), and Fed Chair Jerome Powell’s much-anticipated speech from Jackson Hole.