Gold prices in local markets witnessed a sharp decline of about 3.5% during last week's trading, affected by a 3.3% drop in the global ounce price, due to the strength of the dollar and profit-taking, along with a relative improvement in risk appetite following positive indicators regarding trade relations between the US and China. This is according to a report issued by the "iSagha" platform for gold and jewelry trading.
Saeed Embaby, the platform's Executive Manager, stated that the 21-carat gold gram decreased by about EGP 200 during the week, after opening trading at EGP 5,750, touching a historical high of EGP 5,900, before closing the week at EGP 5,550.
Globally, the ounce dropped by about $140, from $4,254 to a record level of $4,381, before closing at $4,114 per ounce.
He added that 24-carat recorded EGP 6,343, 18-carat was about EGP 4,757, and 14-carat was around EGP 3,700, while the price of the gold pound stabilized at EGP 44,400.
Embaby confirmed that gold prices in local markets have risen by 48% since the beginning of the year, and by about 57% globally.
Despite the recent declines, Embaby explained that the local market is witnessing a strong wave of demand for gold bars and gold pounds, driven by citizens taking advantage of the recent price correction following the record rise, in hopes of resuming the upward trend in the coming period. He pointed out that the shortage of supply prompted many traders to export in previous periods, in addition to selling waves by gold holders at historical levels.
Disappearance of Bars from the Market and Extended Delivery Periods
Embaby indicated that the supply shortage pushed companies and stores to extend gold delivery periods to range between one week and one month, until the required quantities are secured through import or recycling of scrap and used gold collected from the market.
He noted that this phenomenon is not new to the Egyptian market, as it first clearly emerged in March 2022 after the devaluation of the pound and import restrictions, which at the time prompted citizens to buy gold as a hedging tool amid the dollar scarcity crisis.
He also revealed that the increase in production costs has led to the inability of many stores to adhere to the high craftsmanship fees imposed by companies.
He disclosed that many gold shops are no longer able to commit to the high craftsmanship fees set by companies, due to increased production costs with waves of price increases.
US Inflation Supports Gold Rebound
Gold partially rebounded at the end of Friday's trading, after the release of US inflation data for September, which came in lower than expected, boosting bets on interest rate cuts.
The data showed that the Consumer Price Index (CPI) rose by 3% year-on-year, less than the 3.1% forecast, while core inflation (excluding food and energy) also rose by 3%, down from the previous month.
The “Prime Market Terminal” tool shows a 96% probability of an interest rate cut at the Fed's meeting on October 28-29.
At the same time, business activity in the US accelerated according to S&P Global data, while consumer confidence fell according to the revised University of Michigan reading.
This coincided with the White House announcing a meeting between US President Donald Trump and Chinese President Xi Jinping next week in South Korea, as the deadline for new tariffs approaches in early November.
Geopolitical volatility towards gold also increased after Trump imposed new sanctions on Russia over the Ukraine war, targeting the companies Lukoil and Rosneft.
Strong Forecasts Despite Volatility
Embaby explained that gold achieved exceptional gains this year supported by geopolitical tensions, massive purchases by central banks, and expectations of easing US monetary policy.
Despite the drop in US 10-year Treasury yields to 3.989%, prices underwent a technical correction after a nine-week consecutive rally, which is the fourth-longest rising streak since 1978.
Historical analysis shows that long periods of ascent are usually followed by short-term declines, but these quickly end with the resumption of the long-term upward trend.
Global Banks Raise Forecasts
JPMorgan sees the average gold price potentially reaching $5,055 per ounce during the fourth quarter of 2026, with continued purchases by investors and central banks at a rate of 566 tons quarterly.
Observers consider the current correction to be healthy, natural, and necessary for the continuation of positive momentum, and it does not indicate any fundamental reversal in the overall trend.
Major Banks Raise Their Forecasts
The decline witnessed by gold this week indicates a natural technical correction resulting from profit-taking operations, following the strong rally recorded by the precious metal recently, without reflecting any fundamental shift in the economic factors supporting the upward trend. The current consolidation phase is a healthy and necessary part of sustaining positive momentum in the medium and long term.
It appears that gold is ready to resume its upward trajectory towards higher levels once market movement stabilizes, especially amid expectations of maintaining accommodative monetary policy and continued inflationary pressures. This makes the recent decline a buying opportunity for many investors, rather than the start of a sustained reversal in the trend.
Nevertheless, experts advise a degree of caution in the short term, based on historical patterns that usually show some temporary weakness following long periods of increase, while the fundamentals supporting precious metals remain strong and continue to enhance gold's attractiveness as a safe haven and strategic investment.
In light of the rapid fluctuations witnessed in the markets, gold still seems to maintain its position as one of the most important hedging tools against global economic uncertainty. Inflation remaining above targets, persistent anxiety about fiscal and monetary policies, in addition to escalating geopolitical risks, are all factors that make any price correction a natural movement within a broader upward path.
Forecasts indicate that the market is entering a phase of catching its breath, in preparation for a new round of rises, especially with continued institutional demand and strong central bank purchases.
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