Gold Price Jumps 3% as US Tariffs Begin to Be Implemented

Gold prices rose in local markets during trading on today, Wednesday, with the ounce rising on the global stock exchange, supported by escalating global trade tensions, a weaker US dollar, and turmoil in the Treasury bond market.

Gold prices rose by about EGP 85 in local markets during trading today compared to yesterday's closing price, with the price of a gram of 21-karat gold reaching EGP 4,435, while an ounce rose by about $88, reaching $3,070.

Saeed Imbabi, CEO of iSagha, an online gold and jewelry trading platform, added that a gram of 24-karat gold reached EGP 5,069, a gram of 18-karat gold reached EGP 3,801, while a gram of 14-karat gold reached EGP 2,957, and the gold pound reached EGP 35,480. According to the daily report of the "iSaaga" platform, gold prices in local markets fell by about EGP 30 during trading on Monday. The price of a gram of 21-karat gold opened at EGP 4,380 and closed at EGP 4,350. Meanwhile, the price of an ounce on the global stock exchange witnessed fluctuations, opening at $2,982, rising to $3,020, and closing at $2,982.

The price of gold rose on the global stock exchange, driven by increased global demand from investors to hedge against global market turmoil. This followed the implementation of tariffs imposed by US President Donald Trump amid an escalating global trade war, particularly with the US administration's announcement of a 104% tariff increase on China.

China responded to the US tariffs by applying an additional 84% tariff on all US goods, effective April 10. The trade war has heightened concerns about a global economic slowdown and recession, prompting investors to hedge against risks with gold.

Imbabi noted that growing bets on an emergency interest rate cut by the US Federal Reserve in an effort to stabilize economic conditions are strengthening gold against the dollar.

He added that rising geopolitical risks, uncertainty about Federal Reserve policy, and weak demand for US Treasury bonds will continue to drive demand for gold.

While China's central bank reportedly instructed major lenders to reduce their dollar purchases, a move that may reflect efforts to curb the yuan's depreciation, with the dollar weakening and global trade uncertainty increasing, gold continues to benefit from its safe-haven status and strong international demand.

The price of gold has risen by more than $400 since the beginning of the year, reaching a record high of $3,168 on April 3, and gold-backed exchange-traded funds (ETFs) saw their strongest quarterly inflows in three years, according to the World Gold Council. In a related development, markets are awaiting the minutes of the Federal Open Market Committee's March meeting on Wednesday, along with the release of the US Consumer Price Index (CPI) on Thursday and the US Producer Price Index (PPI) on Friday, to determine the Fed's monetary policy direction for the coming period.