Gold Prices Decline By EGP 175 In Local Markets Over The Course Of A Week

Gold prices in local markets fell by 3.7% during trading last week ending Saturday evening, while the ounce fell by 3.6% during trading last Friday evening, affected by the rise in the dollar and stocks following the tariff truce between the United States and China.

Gold prices in local markets fell by EGP 175 during trading last week, with the price of 21-karat gold opening at EGP 4,715 and closing at EGP 4,540. Meanwhile, the ounce fell by $121, opening at $3,325 and touching $3,120, its lowest level in a month, before closing at $3,204. A gram of 24-karat gold recorded 5,189 Egyptian pounds, a gram of 18-karat gold recorded 3,891 Egyptian pounds, a gram of 14-karat gold recorded approximately 3,027 Egyptian pounds, and the gold pound recorded approximately 36,320 Egyptian pounds.

Gold prices declined in global markets during trading this week, against the backdrop of the tariff truce between the United States and China and the accompanying shift of capital towards riskier assets.

Gold prices fell below the $3,200 level, recording their largest weekly decline since June 2021, amid sharp increases in stock markets. 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, in addition to the intense focus on a Russian-Ukrainian solution, contributed to calming geopolitical tensions, reducing the need for safe havens.

Gold prices pared some of their weekly losses following the release of Moody's Investors Service's report on the US economy.

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

The agency said in a statement: "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."

Looking ahead, Moody's said it sees little hope for significant change in government spending.

Earlier, data from the University of Michigan showed that US households have become pessimistic about the economy, as revealed in the May Consumer Sentiment Survey. Inflation expectations are on the rise, previous housing data has been mixed, and import prices have risen. US economic data this week indicated continued progress in reducing inflation. However, Federal Reserve officials remain cautious about easing monetary policy, citing uncertainty over trade policies and 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 at a 2.4% rate 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 rose 1.6% month-on-month in April, from 1.339 million to 1.361 million, below expectations. Building permits fell to -4.7% for the same period after rising 1.9% in March.

US import prices rose 0.1% month-on-month in April, exceeding expectations and surpassing March's -0.4% decline.

In a related development, markets are awaiting a number of Federal Reserve policy statements next week, as well as preliminary purchasing managers' index (PMI) and housing data.