Gold prices in Egypt saw a slight decline over the past week despite heightened volatility in global markets, amid growing geopolitical tensions and concerns over the independence of U.S. monetary policy.
The price of 21-karat gold fell by 10 EGP, dropping from 4,660 to 4,650 EGP per gram. This decline coincided with a modest 0.1% drop in the global ounce price, which slipped from $3,355 to $3,350.
Meanwhile, local prices for other purities were as follows:
24-karat: 5,314 EGP
18-karat: 3,986 EGP
14-karat: 3,100 EGP
Gold sovereign (21-karat): 37,200 EGP
The local market remained relatively stable on Saturday amid the global market's weekend closure. The 21-karat gold price opened at 4,650 EGP, dipped briefly to 4,645 EGP, then closed again at 4,650 EGP.
Strong Year-to-Date Gains
Since the start of 2025, local gold prices have surged 24.3%, gaining around 910 EGP per gram (21-karat), rising from 3,740 EGP in early January to 4,650 EGP this week. The gold sovereign gained 7,280 EGP in the same period.
On the global front, gold ounces jumped nearly 28%, rising by $726, from $2,624 to $3,350, after hitting a historic high of $3,500 on April 22.
A Volatile Week Driven by Fed Signals and Inflation Data
Global gold prices experienced a turbulent week, opening at $3,355, and gradually declining to a low of $3,312 by Thursday morning. The price made several attempts to break above $3,375 but failed to sustain momentum.
Key drivers of price action throughout the week included:
Wednesday: A sharp rally to $3,363 was triggered by rumors of Federal Reserve Chair Jerome Powell’s resignation, but prices pulled back after the news was officially denied.
Friday: Stronger-than-expected U.S. inflation expectations data pushed gold down to $3,350, despite intraday gains in the Asian and European sessions to $3,360.
Politics and Central Bank Independence Weigh on Sentiment
Gold markets have been affected by renewed global trade tensions, particularly between the U.S. and both the European Union and Asia. Concerns are also growing over the independence of U.S. monetary policy following reports that President Donald Trump may be considering replacing Fed Chair Jerome Powell. Although the White House later denied the rumors, such political pressure undermines confidence in the Fed’s autonomy and enhances demand for gold as a safe haven.
Fed Governor Christopher Waller expressed support for a rate cut in July, citing slowing labor market data. However, market expectations remain conservative, pricing in a total of just 45 basis points of easing for 2025. This limited policy shift has reduced gold's appeal as an inflation hedge in an environment of still-elevated yields.
Cooling Inflation Expectations Bring Balance
The University of Michigan’s July survey showed a decline in long-term inflation expectations from 4% to 3.6%, and short-term expectations from 5% to 4.4%. This gives the Fed more flexibility and reduces the urgency for aggressive rate cuts.
Despite its strong performance in 2025, gold's trajectory remains closely tied to developments in U.S. monetary policy, Fed communications, and geopolitical tensions. While political headlines continue to weigh on the U.S. dollar, they simultaneously enhance gold’s appeal as a hedge, especially amid eroding trust in monetary institutions.
Looking Ahead: Key Economic Events Next Week
Financial markets are bracing for several critical events that may shape investor sentiment and central bank actions:
Tuesday: Fed Chair Jerome Powell delivers an opening speech at a major event in Washington, with markets watching for signals on monetary policy direction.
Wednesday: U.S. existing home sales data will be released — a key indicator of housing market activity and consumer confidence.
Thursday: The European Central Bank announces its monetary policy decision, with expectations pointing to a rate hold. U.S. jobless claims and the preliminary S&P PMI data for the manufacturing and services sectors will be published. New home sales figures are also expected.
Friday: The U.S. durable goods orders report is due — a leading indicator of business investment and economic growth momentum.
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