Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Gold Markets Watchful Ahead of Federal Reserve Decision, Local Prices Decline

Gold Service

Mon 29 Apr 2024 | 06:27 PM
Waleed Farouk

Gold prices fell in local markets during Monday's trading, while global markets saw a modest increase after an initial drop, driven by a strengthening dollar. All eyes are now on the upcoming U.S. Federal Reserve meeting scheduled for May 1st, which is expected to determine the future direction of interest rates.

Saeed Embabi, CEO of the online gold and jewelry trading platform "iSagha," reported that local gold prices decreased by approximately 10 Egyptian pounds from Saturday's close, with the price of 21-karat gold settling at 3,090 Egyptian pounds. Meanwhile, on the global stage, the price of an ounce of gold increased slightly by $4 to $2,341.

Embabi detailed further price points in the local market: 24-karat gold at 3,531 Egyptian pounds, 18-karat at 2,649 Egyptian pounds, and 14-karat at about 2,060 Egyptian pounds. The gold pound was priced at 24,720 Egyptian pounds.

He noted that local gold prices had dropped 4.8% last week, losing 155 Egyptian pounds, with the 21-karat gold opening at 3,255 Egyptian pounds and closing at 3,100 Egyptian pounds. Internationally, gold prices dipped by 2.3% or $54, starting at $2,391 per ounce and closing at $2,337.

Embabi highlighted that gold had a weak start this week, following a 2.3% loss last week due to renewed demand for the U.S. dollar amidst sluggish market performance. He emphasized that gold's performance this year would largely depend on the U.S. Federal Reserve's assessment of inflation data and subsequent policy decisions. If the Federal Reserve feels reassured about inflation levels and begins to reduce interest rates, gold prices are likely to rise, driven by increased concerns about economic stability, geopolitical tensions, and the upcoming U.S. elections—factors that often lead investors to seek out stable safe-haven assets.

Despite reaching a four-day high of $2,353 on Friday, gold struggled to maintain stability above $2,350 due to the latest U.S. inflation data. The personal consumption expenditures (PCE) price index, excluding food and energy, showed a year-on-year rise of 2.8% in March, with the core PCE price index on a monthly basis rising by 0.3%.

With the U.S. employment report and the Federal Reserve's decision on interest rates looming this Wednesday, the gold market remains cautious. Investors are keenly awaiting remarks from Jerome Powell, Chairman of the Federal Reserve, which will provide crucial insights into the timing of potential interest rate cuts.