Gold Prices Decline Locally and Globally Amid Profit-Taking and Improved Risk Appetite

Gold prices saw a notable decline in Thursday's trading, weighed down by profit-taking after the precious metal reached a five-week high. Improved global risk sentiment also reduced demand for gold as a safe haven.

In the local market, gold prices fell by approximately EGP 30, with 21-karat gold recording EGP 4,650 per gram, while the ounce dropped by around $25 to $3,365.

The other gold price levels were as follows:

24-karat gold: EGP 5,314

18-karat gold: EGP 3,986

14-karat gold: EGP 3,100

Gold pound coin: EGP 37,200

On Wednesday, prices also ended the session lower, with 21-karat gold opening at EGP 4,710 and closing at EGP 4,680. Meanwhile, the gold ounce dropped from $3,432 to $3,390.

Selling Pressure on Gold and Silver Amid Improved Global Sentiment

Trading opened today with renewed selling pressure on gold and silver, driven by improved investor sentiment following positive developments in global trade. These include the finalization of a trade deal between the United States and Japan, along with reports of a potential 15% tariff reduction between Washington and Brussels.

At the same time, the U.S. dollar saw a modest recovery after three consecutive days of losses, which drew some liquidity away from the gold market. However, ongoing uncertainty regarding the timing of interest rate cuts by the Federal Reserve capped the dollar’s gains, offering some support to the yellow metal.

Markets Eye the Fed Amid Monetary Policy Uncertainty

Despite expectations that the Federal Reserve will keep rates unchanged in its late July meeting, markets continue to price in at least one rate cut before the end of Q4. This comes amid growing divisions within the Fed, with key members like Christopher Waller and Michelle Bowman advocating for a rate cut at the upcoming July 30 policy meeting.

These internal divisions, coupled with mounting political pressures, add to the uncertainty surrounding the future direction of U.S. monetary policy and weigh on both the dollar and precious metals.

Silver Under Market Pressure but Supported by Industrial Demand

Silver, meanwhile, has been affected by the general weakness in precious metals. Still, it continues to receive relative support from growing industrial demand, particularly in sectors like electronics, clean energy, and photovoltaic cells.

The movement in silver prices also remains influenced by other factors, including U.S. bond yields, the strength of the dollar, and upcoming economic data, all of which may redirect investor sentiment in the short term.

Focus Turns to Key Economic Data and ECB Decision

Investors are now closely watching a series of key economic indicators due later today, including preliminary Purchasing Managers’ Index (PMI) readings, U.S. jobless claims, and new home sales. These data points could reshape market expectations regarding the Fed’s next move and the dollar’s direction.

Meanwhile, attention is also on the upcoming monetary policy decision by the European Central Bank (ECB), which could add another layer of short-term volatility to gold and silver markets.