Gold Prices Edge Lower Locally and Globally as Dollar Rises, Markets Await U.S. Inflation Data

Gold prices posted a modest decline in both local and global markets during Thursday’s trading session, pressured by a stronger U.S. dollar and heightened investor caution ahead of the release of U.S. inflation data, which is expected to shape expectations for the Federal Reserve’s next monetary policy moves, according to a report by the iSagha platform.

Saeed Embabi, Executive Director of iSagha, said local gold prices fell by around EGP 10 per gram, with 21-karat gold — the most traded in Egypt — recording EGP 5,770. Meanwhile, global spot gold declined by about USD 16 per ounce to USD 4,326.

Embabi added that 24-karat gold stood at around EGP 6,594 per gram, 18-karat gold reached EGP 4,946, while the gold pound recorded approximately EGP 46,160. He noted that the pullback reflects profit-taking after prices reached their highest levels in nearly seven weeks.

He explained that downside pressure on gold may remain limited, as markets continue to price in expectations of Federal Reserve interest rate cuts in the coming period, particularly after recent U.S. labor market data came in weaker than expected. Lower interest rates reduce the opportunity cost of holding non-yielding assets such as gold, lending support to the metal.

Globally, gold prices slipped as the U.S. dollar index ticked higher after hitting a one-week high, making dollar-denominated gold more expensive for holders of other currencies. Silver prices, meanwhile, hovered near record levels.

Investors are now closely watching the release of the U.S. Consumer Price Index (CPI) for November, due later today. Expectations point to headline inflation rising to 3.1% year-on-year, up from 3% in October, while core inflation is forecast to remain steady at 3%. Weekly U.S. jobless claims data are also scheduled for release.

In related remarks, U.S. President Donald Trump said the next Federal Reserve Chair would be someone who strongly believes in significantly cutting interest rates, noting that he will announce Jerome Powell’s successor early next year. Separately, Federal Reserve Governor Christopher Waller — a potential candidate for the role — said the central bank still has room to lower rates amid signs of labor market weakness, while cautioning against moving too quickly as inflation remains elevated.

Official data showed the U.S. unemployment rate rose to 4.6% in November, its highest level since September 2021 and above market expectations, reinforcing investor bets on two additional 25-basis-point rate cuts next year.

The CME FedWatch Tool currently shows a 24.4% probability of a 25-basis-point rate cut at the Fed’s January meeting, while estimates from the London Stock Exchange Group indicate those odds have risen to around 31% following the latest nonfarm payrolls report.

In other markets, equities retreated — including futures on Canada’s Toronto Stock Exchange — as investors remained cautious ahead of key U.S. inflation data and amid volatility in oil prices driven by geopolitical risks. Oil prices, however, moved higher as markets assessed the likelihood of additional U.S. sanctions on Russia and ongoing global supply risks, particularly those linked to Venezuela’s oil sector.

Analysts say the outcome of U.S. inflation data will be critical in determining the near-term direction of monetary policy. Persistent price pressures could limit the Federal Reserve’s ability to adopt a more accommodative stance, with direct implications for gold and other non-yielding assets.