Gold Prices Decline, 21-Karat at EGP 3745

Gold prices in local markets declined during Saturday’s trading, coinciding with the global market's weekend closure after a 1.6% weekly drop in the ounce price, driven by a strong dollar and reduced political risks following Trump’s victory.

Saeed Embabi, CEO of the “iSagha” platform said that gold prices witnessed a decline by EGP 15 in the local markets during today’s trading, as a gram of 21 karat gold recorded EGP 3745, while an ounce declined to $2684.

He added that a gram of 24 karat gold recorded EGP 4280, a gram of 18 karat gold recorded about EGP 3210, and a pound of gold recorded about EGP 29960.

Imbaby noted that the current price decline represents a buying opportunity, though only after market stabilization.

He further explained that markets remain uncertain, with opposing factors affecting gold's performance, including geopolitical factors, dedollarization, and rising inflation due to Trump’s potential economic policies.

Imbaby highlighted the global market’s gold price decline at the end of the week, influenced by a stronger dollar despite a fall in U.S. Treasury bond yields, resulting from reduced political risk following Trump’s victory. There is now a focus on potential inflationary policies, as some of Trump’s policies are expected to be inflationary, which may pressure the U.S. Federal Reserve.

A second term for President-elect Donald Trump could strengthen gold amid escalating geopolitical tensions, although gold could face challenges from a stronger dollar, U.S. budget deficits, and rising interest rates.

On Thursday, the Federal Reserve cut interest rates, recognizing a strong economy, a slowing labor market, and continued deflation. However, Fed officials remarked that inflation "remains somewhat elevated" despite nearing the 2% target.

In a press statement, Powell hinted at gradual interest rate adjustments, leaving the Fed’s future path open.

An iSagha report identified five key aspects of the new U.S. president’s policies that could affect gold prices, including Trump’s balanced military approach, ending prolonged conflicts, and boosting domestic oil production to reduce import reliance and strengthen the U.S. economy, which would support the dollar.

The report also noted that Trump’s tariffs on Chinese imports, aimed at supporting American industry, would strengthen the dollar.

Furthermore, any shift in monetary policy, with the Fed moving toward a more restrictive approach to address potential inflation under Trump’s policy, could negatively impact gold.

In related news, markets are watching for comments from Federal Reserve officials and key data releases on consumer and producer inflation and retail sales.