Gold Prices Declined by EGP 290 in the Local Market During the Week

Marsad Al Dahab revealed that gold prices in the Egyptian market declined by 4.3% during the past week, while gold prices in the global market fell by 4.7%, following the release of stronger-than-expected U.S. employment data that boosted the U.S. dollar and pushed Treasury yields higher, reinforcing expectations that the Federal Reserve will maintain its restrictive monetary policy. At the same time, lower prices stimulated demand for gold bullion and jewelry in the local market.

According to Marsad Al Dahab, gold prices in the local market dropped by approximately EGP 290 during the week. The price of 21-karat gold opened trading at EGP 6,765 per gram and closed at EGP 6,475, its lowest level since February 5. Meanwhile, gold prices in international markets declined by about $212 per ounce, with gold opening the week at $4,540 and closing at $4,328.

The price of 24-karat gold reached approximately EGP 7,400 per gram, while 18-karat gold stood at EGP 5,550 per gram. The gold sovereign recorded EGP 51,800.

Marsad Al Dahab noted that the decline in both local and global prices encouraged a broad segment of Egyptian consumers to return to the market and take advantage of current price levels, resulting in stronger demand for gold bullion and jewelry over recent days.

The report highlighted a noticeable shortage of small-weight gold bars, particularly quarter-gram, half-gram, and two-gram products, due to rising demand from consumers seeking affordable savings instruments amid declining purchasing power and elevated living costs.

According to data reviewed by Marsad Al Dahab from the World Gold Council, Egyptian demand for gold bars and coins reached approximately 5.7 tonnes during the first quarter of 2026, compared with 5.2 tonnes of gold jewelry, reflecting the continued strength of investment demand within the domestic market.

The report added that jewelry sales also showed signs of improvement after a prolonged slowdown, contributing to greater optimism among traders and manufacturers. The return of demand despite the sharp decline in prices underscores the continued perception of gold as a long-term store of value, with many consumers viewing the recent correction as a buying opportunity.

Marsad Al Dahab explained that the widening gap between local and international gold prices, which reached approximately EGP 190 per gram, reflects strong physical demand in Egypt as well as cautious inventory pricing by traders and manufacturers following the extreme volatility witnessed since the beginning of the year.

The latest selling pressure emerged after the release of the U.S. May employment report, which showed the addition of 172,000 jobs, surpassing market expectations, while the unemployment rate remained steady at 4.3%. The stronger labor market strengthened the U.S. dollar and prompted investors to scale back expectations for interest-rate cuts in the coming months.

Marsad Al Dahab noted that financial markets increasingly regard U.S. labor-market data as one of the most influential indicators shaping interest-rate expectations. Continued strength in employment has increased the likelihood that interest rates will remain elevated for longer, putting pressure on gold while supporting the U.S. dollar and Treasury yields. Markets currently expect the Federal Reserve to leave interest rates unchanged at its upcoming meeting.

The report stressed that these figures confirm gold’s enduring role as one of the most important savings vehicles for Egyptian consumers. Despite gold losing most of its annual gains in global markets, consumer behavior in Egypt remains largely unchanged, with gold bars and coins continuing to dominate demand, reflecting sustained confidence in gold as a store of value during periods of economic uncertainty.

Marsad Al Dahab indicated that the recent correction has reduced gold’s gains in the Egyptian market since the beginning of the year to around EGP 645 per gram, equivalent to approximately 11%. Twenty-one-karat gold opened 2026 at EGP 5,830 per gram before reaching a historic peak near EGP 7,600 per gram in March.

Globally, gold has nearly erased all of its gains for the year. The metal opened 2026 at $4,318 per ounce and reached an all-time high of $5,626 on January 29 before falling back to $4,328 by the end of the week, surrendering most of the gains driven by geopolitical tensions and central-bank purchases.

The report further noted that the severe volatility experienced since the start of the year has increased inventory-management risks for traders and manufacturers, particularly for holdings acquired at higher price levels. As a result, the sector is currently adopting more conservative pricing and liquidity-management strategies.

The recovery in local demand comes at a time when broader global trends, as identified by the World Gold Council, show that demand for gold bars and coins was the primary driver of global gold demand growth during the first quarter of 2026. Investment demand reached approximately 474 tonnes, representing a 42% year-on-year increase and marking the second-highest quarterly level on record.

Marsad Al Dahab stated that these figures reflect a global shift among consumers and investors away from jewelry purchases and toward investment-oriented gold products. The same trend is evident in Egypt through the growing popularity of small-weight gold bars, which are increasingly viewed as a practical savings tool amid rising prices and weaker purchasing power.

In contrast, World Gold Council data showed that global demand for gold jewelry fell to its lowest level since 2020 as record-high prices weighed on purchasing volumes. This makes the recent improvement in Egyptian jewelry sales particularly noteworthy compared with prevailing global trends.

Investors are closely watching a series of important economic indicators this week, including the U.S. Consumer Price Index (CPI), Producer Price Index (PPI), existing home sales, and weekly jobless claims, as well as monetary-policy meetings by the European Central Bank and the Bank of Canada, all of which could significantly influence gold and currency markets.

World Gold Council data also showed that total global gold demand reached approximately 1,231 tonnes during the first quarter of 2026, including 244 tonnes of net purchases by central banks, highlighting gold’s continued role as a strategic reserve asset and a key diversification tool for official reserves worldwide.

The return of demand for both bullion and jewelry despite the recent correction demonstrates that gold continues to maintain its position as one of Egypt’s preferred savings assets. The shortage of small-weight gold bars further confirms strong investment demand from individual buyers, while the premium of local prices over international benchmarks reflects continued caution in inventory pricing amid persistent global market volatility.

Marsad Al Dahab concluded that the recent decline in gold prices does not alter the metal’s long-term strategic outlook. Continued central-bank purchases, rising global debt levels, and persistent geopolitical risks remain supportive factors for gold over the longer term.

The report added that the market is currently undergoing a repricing phase driven primarily by evolving expectations for U.S. interest rates. However, the fundamental drivers supporting gold remain intact, which helps explain the return of physical demand in the Egyptian market despite the recent downturn.