Gold Prices Decline by EGP 230 since Start of November

Gold prices continued to decline in local markets during Thursday's trading, with the ounce declining on the global stock exchange, approaching its lowest level in two months.

The drop was affected by the strength of the dollar as markets await the release of US economic data later today, to obtain more insight on the US Federal Reserve's monetary path.

Said Imbabi, Executive Director of the “i-Sagha”, said that gold prices fell in local markets by EGP 40 during the transactions compared to the end of yesterday’s trading, in which the gram of 21-karat gold recorded EGP 3555and an ounce on the global stock exchange declined by $26 to record $2548.

He added that the 24-karat gold reached EGP 4063, 18-karat registered EGP 3047, 14-karat gold sold at EGP 2370, and the gold pound hit EGP 28440.

On the other hand, gold prices declined in the local markets by EGP 30 during yesterday's trading.

The 21-karat opened trading at EGP 3625 and closed at EGP 3595. Meanwhile, the ounce declined on the global stock market by $26, with transactions beginning at $2600 and concluding at $2574.

Imbabi pointed out that gold prices in local markets have fallen by about EGP 230 since the beginning of November.

The drop was affected by the decline in the ounce on the global stock exchange, the decline in demand, and citizens expecting further declines in prices.

Imbabi pointed out that gold prices continued to decline during today's trading, approaching their lowest level in two months.

The decrease was affected by the strength of the dollar as optimism about US economic growth led to the dollar rising to a new high this year, and high US Treasury bond yields are also contributing to the flow away from gold.

Gold prices touched their lowest level since September 19, nearing $2546 during the beginning of today's trading and the purchase of the US dollar continues in the wake of optimism about the expansionary policies expected by US President-elect Donald Trump.

He pointed out that US President-elect Donald Trump's plans to cut taxes and increase tariffs on imports will accelerate inflation rates, forcing the US Federal Reserve to slow down the monetary easing cycle.

US inflation data released Wednesday showed a slower pace of inflation decline, supporting higher Treasury yields, limiting demand for gold, and leading to smaller rate cuts from the Federal Reserve next year.

The US Bureau of Labor Statistics reported Wednesday that the headline US consumer price index rose 0.2% in October and 2.6% over the past 12 months.

The core index - which excludes the more volatile food and energy categories - rose 0.3% last month and 3.3% in the same period last year.

Alberto Musalem, the president and chief executive officer of the Federal Reserve Bank of St. Louis, indicated that the risk of rising inflation has passed and the stable inflation makes it difficult for the central bank to continue cutting interest rates.

Kansas City Federal Reserve Bank President Jeffrey Schmid said it remains to be seen how much further interest rates will decline or where they might eventually settle.

In a related context, markets are awaiting the Producer Price Index data for October, and weekly unemployment claims, scheduled to be released later today, in addition to statements by Federal Reserve Chair Jerome Powell.