Gold Nears Its Biggest Annual Gain in More Than 45 Years

Gold prices declined in local markets and on the global exchange during Wednesday’s trading, pressured by reduced market bets on an interest-rate cut at the U.S. Federal Reserve’s January meeting, following the release of the minutes of the Federal Open Market Committee’s (FOMC) December meeting, according to a report by the iSagha platform.

Saeed Imbabi, Executive Director of the platform, said local gold prices fell by about 55 Egyptian pounds per gram, with 21-karat gold dropping to EGP 5,830 per gram. Globally, prices declined by around $30, with gold trading near $4,310 per ounce.

He added that 24-karat gold recorded about EGP 6,663 per gram, while 18-karat gold stood at approximately EGP 4,997 per gram. The gold pound was priced at around EGP 46,640.

Gold posted a slight decline in the final trading session of 2025, stabilizing near $4,310 per ounce during European trading, amid selling pressure on precious metals following the release of the Fed minutes, which revealed a clear division within the FOMC regarding the future path of monetary policy.

Some Federal Reserve officials indicated that keeping interest rates unchanged for a longer period may be the most appropriate option, particularly after three rate cuts implemented during the year. Others, however, argued that further cuts could be justified should inflation continue to ease.

Despite the recent pullback, gold prices have surged by about 64% since the beginning of the year, with expectations that the yellow metal could record its strongest annual gains since 1979, supported by growing expectations of renewed U.S. interest-rate cuts in 2026.

Gold is on track to achieve its best annual performance in 2025, after its rally accelerated in late April following U.S. President Donald Trump’s announcement of sweeping global tariffs. This move boosted demand for gold, alongside heavy purchases by central banks and rising holdings of gold-backed exchange-traded funds (ETFs).

Geopolitical tensions have further underpinned demand for gold as a safe haven, amid fading hopes for a peace agreement between Russia and Ukraine, following reports of alleged attacks targeting the residence of Russian President Vladimir Putin.

Moscow announced a tougher negotiating stance, accusing Kyiv of being behind the attack—allegations that Ukraine denied, describing them as attempts to derail the peace process.

In the Middle East, Saudi airstrikes in Yemen, along with Iran’s announcement that it had entered a “full-scale war” with the United States, Europe, and Israel, have heightened fears of a wider regional escalation. Meanwhile, Trump warned of additional strikes should Iran resume development of its nuclear program.

Ongoing tensions between Israel and Iran, as well as escalating disputes between the United States and Venezuela, have also supported demand for safe-haven assets, as investors seek instruments that preserve value during periods of uncertainty—foremost among them gold.

On the other hand, higher margin requirements on gold and silver futures contracts approved by the CME Group could limit gold’s gains, as the move may trigger widespread profit-taking and portfolio rebalancing. Any tangible progress in Ukrainian peace talks could also exert additional pressure on prices.

Markets are awaiting the release of U.S. initial jobless claims data later today, with expectations that claims will rise to around 220,000 for the week ending December 27, compared with 214,000 the previous week. Trading volumes are also expected to thin ahead of the New Year holiday.

The Federal Reserve had previously decided to cut interest rates by 25 basis points, bringing the target range to 3.50%–3.75%, a move supporters attributed to rising downside risks to the labor market and easing inflationary pressures.

Federal Reserve Governor Steven Miran voted against the decision, calling for a larger rate cut, while Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeff Schmid opposed the move, favoring holding rates steady.

According to the minutes of the FOMC meeting held on December 9–10, most policymakers believe that further interest-rate cuts would be appropriate over the medium term, provided inflation continues to decline, though views differed regarding the timing and scale of such cuts.

Following the release of the minutes, the probability of a rate cut at the January meeting fell to around 15%, based on federal funds futures and the CME FedWatch tool.

Despite short-term pressures, gold continues to maintain a positive medium-term outlook, supported by upward momentum in the Relative Strength Index (RSI), reflecting sustained investor appetite for the precious metal.