Gold prices decline locally and globally amid rising energy costs and inflation concerns

Gold prices declined in both the local market and global exchanges during Monday’s trading, pressured by rising energy prices that are intensifying inflationary pressures and reducing expectations for interest rate cuts by the U.S. Federal Reserve, according to a report released by the iSagha platform.

Engineer Saeed Embabi, CEO of the iSagha platform, said that gold prices in the local market fell by about 75 Egyptian pounds during today’s trading, with the price of 21-karat gold recording EGP 7,350 per gram. Meanwhile, the ounce on the global market declined by about $2, reaching $5,019.

Embabi added that 24-karat gold recorded around EGP 8,400 per gram, while 18-karat gold reached approximately EGP 6,300 per gram, and the gold pound was priced at about EGP 58,800.

He noted that gold prices in the local market had risen by about EGP 200 during the past week, as the price of 21-karat gold opened trading at EGP 7,225 and closed the week at EGP 7,425. In contrast, the global ounce declined by about $151, starting the week at $5,172 and ending near $5,021.

Globally, gold fell for the fourth consecutive session, fluctuating around the $5,000 per ounce level during European trading hours on Monday.

Precious metals, including gold, continue to face pressure from rising energy prices, which are fueling inflation concerns and reducing expectations that the U.S. Federal Reserve and other major central banks will cut interest rates in the near term.

These developments come amid escalating geopolitical tensions in the Middle East after the United States launched an attack on Khark Island, Iran’s main oil export hub, over the weekend. Although U.S. President Donald Trump stated that oil infrastructure was not directly targeted, the strike triggered retaliatory attacks from Tehran against Israel and energy infrastructure in several Arab countries.

The U.S.–Israeli war with Iran has now entered its third week with no clear resolution in sight, adding further volatility to global financial markets.

Despite geopolitical tensions typically boosting demand for gold as a safe haven, prices have come under pressure as demand weakened following reports that the United States may announce a coalition to escort commercial ships through the Strait of Hormuz.

President Donald Trump has called on allied countries—including the United Kingdom, France, China, and Japan—to help secure the strategic waterway, while European Union foreign ministers meet in Brussels to discuss a potential naval response to the effective closure of the strait.

Meanwhile, U.S. Energy Secretary Chris Wright said he expects the conflict to end within the “next few weeks,” which could allow oil supplies to recover and energy prices to ease.

In global markets, spot gold fell 0.3% to $5,001.61 per ounce as of 11:10 GMT, while U.S. gold futures for April delivery declined 1.1% to $5,007.20.

Analysts say the gold market’s focus has gradually shifted from the immediate impact of the Strait of Hormuz disruption to long-term inflation risks. Higher oil prices typically translate into higher inflation, which could force the Federal Reserve to delay or abandon plans to cut interest rates, reducing the appeal of non-yielding assets such as gold.

Oil prices have meanwhile stabilized above $100 per barrel, rising more than 40% this month to their highest level since 2022, after U.S. and Israeli strikes on Iran prompted Tehran to halt shipments through the Strait of Hormuz.

President Donald Trump also urged allies on Sunday to help secure the vital shipping lane, as Iranian forces continued attacks in the waterway amid the ongoing war.

The U.S. Federal Reserve is scheduled to hold a two-day policy meeting this week, and markets widely expect the central bank to keep interest rates unchanged.

Several other major central banks—including the European Central Bank, the Bank of England, and the Bank of Japan—are also set to hold policy meetings this week, with policymakers closely assessing the impact of the Middle East conflict on inflation, economic growth, and future monetary policy.

In a research note, UBS said it expects central banks to closely monitor inflation risks without rushing to raise interest rates, adding that a prolonged conflict could increase global economic risks and support demand for gold as a hedge.

Markets are also awaiting a series of central bank meetings in the coming days, led by the Federal Reserve’s policy decision.

The Reserve Bank of Australia will meet at the start of the week, followed by the Bank of Canada, while the Bank of Japan will also hold its meeting on the same day. On Thursday, policy decisions are expected from the Swiss National Bank, the Bank of England, and the European Central Bank, with most forecasts pointing to unchanged policies.

In addition, markets will closely watch several key U.S. economic releases, including industrial production data, housing market indicators, and inflation and employment figures, which may provide further signals about the trajectory of the U.S. economy in the coming period.