Gold Posts Best Weekly Performance in Three Months as Local Prices Gain EGP 305 Since Early July

Gold prices continued to rise in both the Egyptian market and global exchanges on Wednesday, extending gains for a fourth consecutive session and heading toward their strongest weekly performance in more than three months. The rally has been driven by increased safe-haven demand amid escalating geopolitical tensions in the Middle East and growing anticipation ahead of next week's U.S. Federal Reserve policy meeting.

The price of 21-karat gold, Egypt's benchmark, climbed by approximately EGP 90 compared with Tuesday's close to reach around EGP 5,990 per gram. Meanwhile, spot gold rose by about $34 to approximately $4,120 per ounce at the time of writing.

Twenty-four-karat gold reached approximately EGP 6,834 per gram, while 18-karat gold traded near EGP 5,134 per gram. The gold pound coin was priced at around EGP 47,920.

On Tuesday, the local market had already recorded a gain of about EGP 70 per gram for 21-karat gold, rising from EGP 5,830 at the opening of trading to around EGP 5,900 by the close. During the same session, spot gold advanced by roughly $78, increasing from $4,008 to approximately $4,086 per ounce.

Local Gold Up 5.4% Since the Beginning of July

Since the start of July, global gold prices have increased by approximately $103, or 2.6%, compared with the end-of-June level of $4,017 per ounce. Over the same period, Egypt's 21-karat gold price has climbed by about EGP 305 per gram, representing a gain of 5.4% from EGP 5,685.

Despite the recent recovery, global gold remains down by about $198, or 4.6%, since the beginning of 2026, compared with the year's opening price of $4,318 per ounce. In contrast, Egypt's 21-karat gold has gained approximately EGP 160 per gram, or 2.7%, from its opening level of EGP 5,830.

The stronger performance of the local market compared with global gold has been largely attributed to the appreciation of the U.S. dollar against the Egyptian pound. The official selling exchange rate rose from around EGP 48.92 at the beginning of July to approximately EGP 51.30, an increase of nearly 4.9%.

Local Premium Falls to EGP 25 Per Gram

The local market premium has declined to around EGP 25 per gram, compared with more than EGP 110 last week and approximately EGP 210 at the end of June.

Since the beginning of July, the premium has narrowed by roughly EGP 185 per gram, or about 88%, reflecting a significant improvement in the balance between supply and demand and bringing domestic prices closer to levels justified by international gold prices and the official exchange rate.

The sharp decline in the premium, despite rising global gold prices and a stronger U.S. dollar, indicates that the Egyptian market is gradually returning to more normal pricing conditions after a period of exceptional volatility that widened the gap between domestic and international prices.

Geopolitical Risks Continue to Support Gold

Spot gold has regained the important $4,100-per-ounce level, reaching its highest point in nearly two weeks as renewed investment inflows and safe-haven buying gained momentum amid concerns over an expanding conflict in the Middle East and potential disruptions to energy supplies and global shipping routes.

Higher oil prices have also intensified inflation concerns, supporting gold's appeal as an inflation hedge. At the same time, stronger oil prices have provided support for the U.S. dollar and Treasury yields, reinforcing expectations that the Federal Reserve may keep interest rates elevated for longer.

Current market movements reflect a tug-of-war between rising safe-haven demand on one side and the strength of the U.S. dollar alongside expectations of higher interest rates on the other, contributing to continued volatility despite gold's recovery above the $4,100 level.

Markets Await the Federal Reserve Meeting

Investors are now focused on the Federal Reserve's policy meeting scheduled for July 28–29. Markets broadly expect interest rates to remain unchanged, while attention will center on the Federal Open Market Committee's statement and the press conference by Federal Reserve Chair Kevin Warsh for clues about the future direction of U.S. monetary policy amid persistent inflationary pressures and elevated energy prices.

Market participants will be watching closely not only the interest-rate decision itself but also the tone of the Fed's guidance regarding inflation and economic growth. Any indication that policymakers intend to maintain a restrictive monetary stance for an extended period could strengthen the U.S. dollar and Treasury yields, weighing on gold prices. Conversely, a less hawkish tone could encourage additional demand for the precious metal.

In its latest Mid-Year Outlook, the World Gold Council said that gold's performance during the second half of 2026 will continue to depend on interest-rate expectations, the U.S. dollar, geopolitical risks, and investment flows. The Council expects prices to remain broadly range-bound under its base-case scenario, while noting that weaker economic growth or lower interest rates could provide additional upside for gold. Conversely, persistently higher bond yields and a stronger dollar could create further headwinds.

The recent EGP 305 increase in local gold prices since the beginning of July reflects the combined impact of higher international gold prices and the appreciation of the U.S. dollar, despite the sharp decline in the domestic market premium. This highlights the growing influence of global economic developments on Egypt's gold market.