Gold Prices Fall in Egypt Despite a Modest Recovery in Global Markets from Seven-Month Lows

Marsad Al Dahab reported a decline in local gold prices during Thursday’s trading session, while gold prices on international markets posted a modest recovery following a sharp selloff that pushed bullion to its lowest level since November 2025. The market remains under pressure from a stronger U.S. dollar, rising Treasury yields, and investor anticipation of upcoming U.S. economic data.

The Director of Marsad Al Dahab Economic Studies stated that the price of 21-karat gold fell by EGP 15 compared with Wednesday’s close, reaching approximately EGP 6,055 per gram. Meanwhile, the global gold price rose by $13 to around $4,086 per ounce, according to World Gold Council data at the time of reporting.

The report noted that 24-karat gold traded at approximately EGP 6,920 per gram, while 18-karat gold reached EGP 5,190 per gram. The gold pound coin was priced at about EGP 48,440.

Gold prices had already recorded a sharp decline during Wednesday’s session, with 21-karat gold opening at EGP 6,350 and closing at EGP 6,070 per gram. At the same time, global gold prices dropped by $191, falling from $4,259 to $4,068 per ounce.

According to the report, the gap between local and international pricing currently stands at roughly EGP 100 per gram. Despite ongoing caution among traders, buying activity has improved as consumers and investors take advantage of lower prices to gradually build new positions.

The recent correction has reduced local gold gains since the beginning of the year to approximately EGP 225 per gram, compared with the record highs seen in January. Globally, gold has lost around $237 per ounce since the start of 2026.

The report also indicated that lower prices have contributed to a relative improvement in sales, particularly for bullion bars and small-weight investment products, as a segment of savers and investors has returned to the market following the recent decline.

On the global front, gold prices staged a limited rebound on Thursday after touching $4,024 per ounce, their lowest level since November 2025. However, the metal continues to trade below the $4,100 level, reflecting persistent selling pressure.

The recent decline follows losses exceeding $400 per ounce over the past three trading sessions, driven by a stronger U.S. dollar and rising Treasury yields amid growing expectations that the Federal Reserve will maintain a restrictive monetary policy stance for longer.

Geopolitical tensions in the Middle East continue to influence investor sentiment, with uncertainty surrounding U.S.-Iran relations remaining a key market concern, despite indications that diplomatic channels remain active.

Meanwhile, U.S. consumer price data for May showed annual inflation accelerating to 4.2%, reinforcing expectations that interest rates will remain elevated for an extended period. This pushed real Treasury yields higher and increased the attractiveness of the U.S. dollar relative to non-yielding assets such as gold.

Higher oil prices, which have risen above $112 per barrel, have further fueled inflation concerns and added pressure on precious metals markets.

Market expectations also suggest a reduced likelihood of near-term interest rate cuts, with investors increasingly betting that restrictive monetary policy will remain in place through the end of the year, representing one of the most significant headwinds for gold prices.

Despite current pressures, official sector demand continues to provide long-term support for gold. World Gold Council data showed that central banks purchased 244 tonnes of gold during the first quarter of 2026, while many countries continue to increase their gold reserves as part of broader reserve diversification strategies.

In addition, the People's Bank of China expanded its gold reserves for the nineteenth consecutive month in May, highlighting the continued commitment of major central banks to increasing gold holdings despite recent price weakness.

Marsad Al Dahab believes that the current decline primarily reflects the impact of U.S. monetary policy, higher real yields, and a stronger dollar rather than any significant deterioration in physical gold demand.

Although recent losses have been substantial, ongoing geopolitical tensions and elevated energy prices could help limit further downside, particularly if markets begin to reprice inflation risks or concerns about slower global economic growth.

Furthermore, continued central bank purchases and the ongoing diversification of international reserves suggest that the structural factors supporting gold remain intact, reducing the likelihood of a prolonged bearish trend.

Marsad Al Dahab expects gold prices in the coming period to remain highly sensitive to U.S. inflation data, Federal Reserve policy expectations, Treasury yield movements, and geopolitical developments across the Middle East.

Investors are now awaiting U.S. Producer Price Index data, weekly jobless claims figures, and comments from Federal Reserve officials for additional clues regarding the direction of gold prices during the remainder of the month.