Gold prices edge higher locally amid global market holiday

Gold prices posted a slight increase in the local market during Saturday’s trading, coinciding with the weekend closure of global exchanges, following strong gains in international prices last week, when the ounce rose by 2.4%. The move comes amid heightened economic uncertainty and continued geopolitical tensions linked to the Russia–Ukraine war, according to a report by iSagha, the gold and jewelry trading platform.

Saeed Embaby, Executive Director of iSagha, said local gold prices rose by around EGP 10 compared to Friday’s close. The price of 21-karat gold reached EGP 5,745 per gram, while 24-karat gold recorded about EGP 6,566, 18-karat gold stood at EGP 4,924, and the gold pound was priced at EGP 45,960.

Globally, gold prices rose by nearly USD 100 per ounce over the past week, settling at USD 4,299.

Since the beginning of the year, gold has recorded nearly 50 new record highs, rising by more than 65% so far this year, marking its strongest annual performance since 1979.

Despite these gains, gold’s performance appears modest compared to silver. Although the grey metal retreated from recent highs above USD 64.66 per ounce, it still gained more than 6% over the week and is trading at historic levels, with prices up around 115% on a yearly basis.

Many analysts expect the Federal Reserve to continue cutting interest rates in the coming period, even as inflation remains elevated. This outlook implies persistently lower real yields, reducing the opportunity cost of holding gold as a non-yielding asset.

At the same time, ongoing economic and geopolitical uncertainty is expected to keep global GDP growth in check next year. While the emerging artificial intelligence-driven economy is forecast to support equity markets through 2026, rising risks in stock markets continue to enhance gold’s appeal as a portfolio diversification tool.

Although gold has seen unprecedented demand this year, it still represents only a small share of global financial assets, leaving ample room for investors to further diversify their portfolios into the metal.

Many analysts continue to view USD 5,000 per ounce as an achievable target for gold next year. Meanwhile, silver prices are projected to range between USD 75 and USD 80 per ounce, with some forecasts even pointing to a potential move toward USD 100.

Gold prices remain supported by uncertainty surrounding the Federal Reserve’s policy stance and weak economic data, despite mixed comments from central bank officials. Two of the three dissenting policymakers expressed concerns about inflation remaining at excessively high levels, particularly amid a lack of sufficient economic data, most notably the Consumer Price Index (CPI).

The weaker-than-expected jobless claims report helped justify the central bank’s position, as the number of Americans filing for unemployment benefits increased. However, as Federal Reserve Chair Jerome Powell noted, much of the data may be “misleading” due to the U.S. government shutdown.

On the geopolitical front, Russia–Ukraine peace talks appear to have stalled. The White House spokesperson expressed President Donald Trump’s dissatisfaction with the slow pace of negotiations and his disappointment with Ukrainian President Volodymyr Zelenskyy for not signing the U.S.-proposed peace plan.

Gold prices have largely ignored recent comments from Federal Reserve officials that have so far shaped expectations for interest rates next year. However, Jeffrey Schmid, President of the Kansas City Federal Reserve, took a more cautious stance, arguing that inflation remains “too high” and that monetary policy should stay moderately restrictive. He added that the economy continues to show momentum, suggesting policy is not overly restrictive.

Meanwhile, Austin Goolsbee, President of the Chicago Federal Reserve, said it would be better to wait for additional data, particularly on inflation and the labor market. Nevertheless, he noted that he is not hawkish on interest rates for next year and expects a 50-basis-point cut if the economy evolves as anticipated.

Philadelphia Fed President Anna Paulson said she remains concerned about weakness in the labor market, adding that inflation could ease next year as the effects of tariffs—which were a key driver of price pressures above target this year—begin to fade.

In contrast, Cleveland Fed President Beth Hammack remains focused on elevated inflation and favors a more restrictive monetary policy. She said the current interest rate is near the neutral level but added that she would prefer a tighter stance to exert additional pressure on inflation.

According to the U.S. Department of Labor, initial jobless claims rose to 236,000 for the week ended December 6, up sharply from a revised 192,000 the previous week. Continuing claims fell to 1.838 million for the week ended November 29, down from 1.937 million, indicating relative stability in long-term unemployment.

Markets are now awaiting next week’s U.S. employment data for October and November, along with November inflation figures, which are expected to add to volatility in gold and precious metals markets.