Gold prices in the Egyptian local market declined during Thursday’s trading, despite slight gains in the ounce on the global market, supported by the escalating war in the Middle East, which has increased the appeal of the precious metal as a safe haven. However, renewed inflation concerns driven by rising oil and gas prices have prompted traders to delay expectations for interest rate cuts by the Federal Reserve, according to a report issued by the iSagha platform.
Saeed Embabi, CEO of iSagha, said that the price of 21-karat gold fell by about EGP 25 to record EGP 7,225 per gram, while the global ounce rose by about $29 to reach $5,163.
He added that 24-karat gold recorded EGP 8,257 per gram, while 18-karat gold reached EGP 6,193 per gram, and the gold pound approached EGP 57,800.
Embabi explained that weak liquidity in the local market led to a decline in gold prices in Egypt despite the slight increases seen in global markets.
Globally, gold prices rose as the war in the Middle East entered its sixth day without any clear indication of a resolution, boosting demand for safe-haven assets. Gold climbed as much as 1.1% to approach $5,200 per ounce before slightly retreating as the U.S. dollar recovered from earlier losses.
Gold extended gains for a second consecutive session as traders sought safe-haven assets amid the ongoing conflict in the region.
The moves come as military operations continue, with U.S. and Israeli forces carrying out strikes on Iranian territory, while Iran launched missiles toward several Gulf countries, targeting critical energy infrastructure, effectively disrupting the strategic Strait of Hormuz.
Reports also indicated that a U.S. submarine sank an Iranian warship off the coast of Sri Lanka, in a major military escalation that U.S. Defense Secretary Pete Hegseth described as “the first attack of its kind on an enemy since World War II.”
The widening military confrontation and the exchange of missile and drone strikes across the Middle East have heightened fears of a prolonged regional conflict, encouraging investors to move away from risk-sensitive assets and toward gold, traditionally seen as a hedge against geopolitical instability and market turmoil.
Meanwhile, Reuters reported that The New York Times cited Iranian intelligence officials as signaling to the U.S. Central Intelligence Agency (CIA) their willingness to explore the possibility of talks to end the war. However, Tehran later denied the report, leaving the duration of the conflict and its economic consequences uncertain.
At the same time, the United States is preparing to impose a temporary global tariff of 15% this week, replacing the previous 10% rate that had been implemented after the Supreme Court struck down most of the tariffs previously imposed by President Donald Trump.
Treasury Secretary Scott Bessent stated that the rate could return to previous levels within about five months as new trade investigations progress.
Despite the support gold is receiving from geopolitical tensions, rising energy prices and the resulting inflationary pressures could push the Federal Reserve to keep interest rates higher for longer, which may limit gains for non-yielding assets such as gold.
In this context, the yield on the U.S. 10-year Treasury rose for a fourth consecutive session to 4.11%, as markets assessed developments in the Iranian conflict, tariff updates, and incoming economic data.
Analysts at ING noted that gold currently faces competing macroeconomic forces. The inflationary impact of the Middle East conflict through sharply higher energy prices could reinforce expectations of higher interest rates for longer, posing a headwind for non-yielding assets like gold.
However, they added that escalating geopolitical uncertainty continues to support a risk premium in the market, helping sustain prices despite the pressure from interest rate expectations.
Morgan Stanley strategists, led by Amy Gower, wrote in a note that uncertainty typically supports safe-haven demand, suggesting further upside potential for gold prices, although recent price movements have been more mixed alongside the strength of the U.S. dollar.
Strategists also said that the recent selling in gold may reflect investors’ need to raise liquidity during periods of market stress rather than a fundamental shift in sentiment toward the precious metal.
They added that gold’s recent weakness is likely temporary if the current geopolitical environment persists, suggesting that recent selling is probably linked to liquidity needs rather than a structural change in market direction.
Follow the latest news on Google News
