Marsad Al Dahab reported that local gold prices declined by 4% over the past week, while gold prices on the global market fell by 1.6%, as continued U.S. dollar strength and elevated U.S. Treasury yields weighed on the precious metals market. At the same time, the narrowing local premium and the appreciation of the Egyptian pound allowed a greater share of global price declines to be reflected in domestic gold prices.
Local 21-karat gold fell by EGP 240 during the week, opening at EGP 6,020 per gram before dropping to EGP 5,600—its lowest level since December 4, 2025—before recovering part of its losses to close the week at EGP 5,780 per gram.
Meanwhile, spot gold lost $67 during the week, opening at $4,155 per ounce before falling to $3,959, its lowest level since November 5, 2025, and ending the week at $4,088 per ounce.
Twenty-four-karat gold closed at approximately EGP 6,606 per gram, while 18-karat gold reached EGP 4,954 per gram. The gold sovereign settled at EGP 46,240.
June Losses Erase Most of the Year's Gains
Since the beginning of June, local gold prices have declined by EGP 985 per gram after 21-karat gold opened the month at EGP 6,765. Despite the sharp monthly decline, prices remain only EGP 50 below their opening level for 2026, which stood at EGP 5,830 per gram.
Globally, gold has fallen by $452 per ounce since the beginning of June after opening the month at $4,540. Compared with the beginning of the year, bullion has declined by $230 from its opening price of $4,318 per ounce, erasing all of its gains recorded earlier in 2026.
Lower Premium Reflects Better Transmission of Global Prices
The local gold premium—defined as the difference between the actual domestic market price and the fair value calculated using international gold prices and the U.S. dollar exchange rate—declined from EGP 203 above fair value at the beginning of the week to EGP 105 by the end of the week, marking its lowest level in several months.
The decline reflects a stronger transmission of international price movements into the Egyptian market, supported by the appreciation of the Egyptian pound. At the same time, the continued existence of a positive premium indicates that investment demand for gold bars and sovereigns remains resilient while the market continues to maintain a degree of hedging against future pricing risks.
Local 21-karat gold had previously reached a record high of around EGP 7,600 per gram on March 2 before retreating to EGP 5,780 by the end of last week, representing a decline of nearly EGP 1,820 from its all-time high.
Stronger Egyptian Pound Supports the Decline in Local Gold Prices
The Egyptian gold market has become increasingly responsive to global price movements as the Egyptian pound continued to strengthen against the U.S. dollar.
According to data from the Central Bank of Egypt, the average exchange rate declined from EGP 49.98 at the beginning of the week to EGP 49.46 by the end of the week, a decrease of 52 piastres, or approximately 1%. This allowed a larger share of the decline in international gold prices to be transmitted to the local market while contributing to the sharp contraction in the local premium.
As a result, the premium narrowed from EGP 203 to EGP 105 within a single week, indicating that domestic gold prices are increasingly reflecting global market movements.
Why Did Gold Prices Decline?
The decline in gold prices throughout June was driven by a combination of factors, including continued U.S. dollar strength, rising Treasury yields, and persistent expectations that the Federal Reserve will maintain restrictive monetary policy for an extended period.
Although the latest U.S. inflation data broadly met market expectations, they reinforced expectations that interest rates will remain elevated, reducing gold's attractiveness as a non-yielding asset. At the same time, easing geopolitical tensions and weaker safe-haven demand added further pressure to bullion prices throughout most of the month.
The Egyptian market was affected even more significantly during recent weeks, supported by the stronger Egyptian pound and the decline in the local premium, allowing global price declines to pass through to domestic prices more efficiently than in previous periods, when the gap between local and international prices was considerably wider.
Several international financial institutions, including ING, have also revised their gold outlook lower for the second half of the year as a result of continued dollar strength and the Federal Reserve's hawkish stance. Nevertheless, analysts continue to believe that sustained central bank gold purchases could provide long-term support and limit any deeper price declines.
MGI Reading: Egypt's Gold Market Is Becoming More Closely Aligned with Global Markets
The Marsad Gold Index (MGI) is based on five key variables: global gold prices, exchange rates, the local premium, investor sentiment, and supply-demand dynamics. The index is designed to provide a comprehensive weekly assessment of the Egyptian gold market.
Global Gold
Global gold remained under pressure for the sixth consecutive week, falling to $3,959 per ounce—its lowest level since November 5, 2025—before recovering to close at $4,088. Since the beginning of June, bullion has lost $452 per ounce, erasing all gains recorded earlier this year in one of the sharpest corrections of 2026.
U.S. Dollar and Exchange Rate
Although continued U.S. dollar strength and rising Treasury yields continued to pressure global gold prices, the appreciation of the Egyptian pound accelerated the transmission of those losses into the domestic market. According to the Central Bank of Egypt, the average exchange rate declined from EGP 49.98 to EGP 49.46 per U.S. dollar during the week.
Local Premium
The local premium recorded one of its most significant improvements in recent months, narrowing from EGP 203 to EGP 105 above fair value. This reflects improved pricing efficiency in the Egyptian market and stronger alignment between domestic and international gold prices.
Investor Sentiment
Despite the decline in 21-karat gold from its record high of EGP 7,600 to EGP 5,780 per gram, the persistence of a positive premium alongside continued demand for gold bars and sovereigns suggests that gold remains a preferred long-term savings and hedging asset for many investors.
Supply and Demand
Market conditions indicate a better balance between supply and demand compared with previous months. The decline in the local premium reflects improved market equilibrium, while the continued existence of a premium above fair value confirms that investment demand remains present within the domestic market.
Marsad Al Dahab Assessment
The latest MGI reading indicates that Egypt's gold market is undergoing a broad repricing process driven by three primary factors: the sharp decline in global gold prices, the contraction of the local premium to EGP 105—its lowest level in months—and the continued appreciation of the Egyptian pound.
These developments suggest that domestic gold prices are increasingly being driven by fundamental economic factors rather than exceptional local market distortions. As a result, price movements in the coming period are expected to reflect global market trends more closely unless new domestic developments emerge that significantly alter pricing dynamics.
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