Gold Prices Decline 1.2% On Global Stock Exchanges Over The Course Of A Week

Gold prices declined in local markets during trading on Saturday, coinciding with the global stock exchange's weekly holiday. The ounce suffered a weekly loss of approximately 1.2%, affected by the rise of the dollar following the tariff truce between the United States and China.

Gold prices fell in local markets by approximately EGP 10 compared to yesterday's closing price, with the price of a gram of 21-karat gold reaching EGP 4,530. Meanwhile, the price of an ounce of 21-karat gold closed the week at $3,204 yesterday, Friday, with a weekly loss of approximately $37.

The price of a gram of 24-karat gold reached EGP 5,177, while the price of a gram of 18-karat gold reached EGP 3,883. The price of a gram of 14-karat gold reached approximately EGP 3,020, and the price of a gram of gold reached approximately EGP 36,240. Gold prices in local markets fell by EGP 40 during trading on Friday, with 21-karat gold opening at EGP 4,590 and closing at EGP 4,540. An ounce of gold fell by $25, opening at $3,223 and closing at $3,204.

He explained that gold prices in global markets declined during trading this week, due to the tariff truce between the United States and China and the accompanying shift in capital toward riskier assets.

News of a de-escalation in the trade war between the United States and China and an agreement to reduce tariffs by 115% for 90 days led to a decline in gold.

The ceasefire between Pakistan and India, along with the intense focus on a Russian-Ukrainian solution, also contributed to calming geopolitical tensions, reducing the need for safe havens.

Gold prices pared some losses after falling below $3,200 in Friday trading, after Moody's Investors Service downgraded the United States' credit rating by one notch.

The agency lowered the U.S. debt rating from Aaa to Aa1, citing rising interest costs and unsustainable debt growth. At the same time, it revised its outlook for the United States to stable from negative.

"This one-notch downgrade on our 21-notch credit rating scale reflects the increase, over more than a decade, in government debt ratios and interest payments to levels well above those of similarly rated countries," the agency said in a statement.

Looking ahead, Moody's said it sees little hope that government spending will change significantly.

Earlier, data from the University of Michigan showed that U.S. households have become pessimistic about the economy, as revealed in the May survey of consumers. Inflation expectations are on the rise, previous housing data has been mixed, and import prices have risen. Following the data release, gold pared some of its losses, as market participants anticipated a more than 55 basis points of monetary policy easing from the Federal Reserve. However, as they digested the data, US Treasury yields recovered from their previous losses, and the dollar turned higher.

This is due to US economic data this week indicating continued progress in reducing inflation. However, Federal Reserve officials remain cautious about monetary policy easing, citing uncertainty surrounding trade policies, tariffs, and their potential impact on inflation. On the growth front, retail sales continued to slow in April, but the latest update from the Atlanta Federal Reserve's GDP Now report indicates that the US economy may grow by 2.4% in the second quarter of 2025.

The University of Michigan's Consumer Confidence Index fell in May to its lowest level since July 2022, at 50.8, below expectations of 53.8, compared to 52.2 in April. Americans' inflation expectations for the next year rose from 6.5% to 7.3%, and over the next five years jumped from 4.4% to 4.6%.

US housing starts also rose in April by 1.6% month-over-month, from 1.339 million to 1.361 million, below expectations. Building permits fell for the same period to -4.7% after recording a 1.9% increase in March. US import prices rose 0.1% month-on-month in April, exceeding expectations and outpacing March's -0.4% decline.

Federal Reserve officials remain cautious about cuts despite progress in reducing inflation; US Treasury yields rose, supporting the strength of the US dollar.

In the coming week, markets are awaiting a number of comments from Federal Reserve members, in addition to preliminary purchasing managers' index (PMI) and housing data.