Gold Prices Decline 0.4% Globally and Locally Amid Strong U.S. Data and Progress in Trade Negotiations

Gold prices in local markets fell by 0.4% during the week ending Saturday, while global spot prices dropped by the same percentage. The decline followed strong U.S. economic data and notable progress in trade negotiations between Washington and its partners, reducing demand for the precious metal as a safe-haven asset.

In Egypt, the price of 21-karat gold fell by EGP 20 over the week, moving from EGP 4,650 to EGP 4,630 per gram, in tandem with the global spot price slipping 0.4% from $3,350 to $3,337 per ounce.

Meanwhile, 24-karat gold recorded EGP 5,291 per gram, 18-karat stood at EGP 3,969, 14-karat at EGP 3,087, and the gold pound (8 grams of 21-karat) was priced at EGP 37,040.

Despite a three-basis-point drop in U.S. 10-year Treasury yields to 4.386%, gold did not benefit as the U.S. dollar regained some strength, supported by optimism in global trade markets. Investors are now anticipating that the Federal Reserve will maintain its benchmark interest rate within the 4.25%–4.50% range for the fifth consecutive meeting, backed by labor market data showing resilience.

Trade-related developments added to market optimism, with Washington and Tokyo announcing a new agreement, while expectations grew for a potential U.S.–EU deal before early August. Former U.S. President Donald Trump stated there was a “50/50 chance” of reaching such an agreement, suggesting that tariffs ranging from 10% to 15% could be implemented.

Looking ahead, key U.S. economic events scheduled for the coming week include the Federal Reserve’s July 30 policy decision, preliminary Q2 GDP data, core Personal Consumption Expenditures (PCE), and non-farm payrolls.

Gold remains in a phase of relative stability after a strong rally that peaked in April, when geopolitical tensions and tariff disputes pushed prices near record highs of $3,500 per ounce. However, as trade relations improved and geopolitical risks eased, momentum subsided, and investment demand weakened. Physical demand in key markets such as India has not been sufficient to offset this decline, as high prices have reduced purchase volumes despite maintaining high nominal values.

Central banks continue to support the gold market as they seek to diversify reserves away from the U.S. dollar, though their purchases in Q1 2025 were lower than those of the previous year. Meanwhile, gold-backed exchange-traded funds (ETFs) saw notable inflows.

Forecasts for gold prices remain mixed, with some analysts projecting a rise to $4,000 per ounce, while more cautious outlooks see the potential for a pullback toward $2,800. Any significant upward trend would likely require strong catalysts such as a sharp global economic slowdown, renewed geopolitical tensions, or substantial U.S. dollar weakness. Conversely, improving economic conditions and reduced risk factors could push investors toward higher-risk assets, exerting further downward pressure on gold.

In this volatile financial environment, relying solely on numerical forecasts is risky. Analysts emphasize the importance of tracking fundamental indicators such as central bank policies, gold reserve trends, ETF movements, and the metal’s correlation with the U.S. dollar.