Gold prices in Egypt’s local market recorded a slight increase of 0.47% during June, while global prices for an ounce fell marginally by around 0.5%, reflecting sharp volatility across both domestic and international markets, according to a recent report.
Local Market Movements: Political Tensions Push Prices Higher
Egypt's gold market witnessed noticeable price fluctuations throughout June. The price of 21-karat gold rose by EGP 20 per gram, starting the month at EGP 4,600, and climbing to EGP 5,000 by mid-month — the highest level recorded — driven primarily by heightened geopolitical tensions between Iran and Israel.
As tensions eased, prices dropped to their monthly low of EGP 4,580, before closing June at EGP 4,620 per gram.
On the global front, gold started the month at $3,290 per ounce, peaking at $3,453 amid rising military conflict, then gradually declined to close the month at $3,308.
Key Market Drivers: Geopolitics and Fed Uncertainty
The June gold price trajectory was shaped by several core factors, most notably the geopolitical instability in the Middle East, particularly the Iran-Israel conflict, and continued uncertainty over U.S. Federal Reserve monetary policy.
These issues caused pricing disruptions in Egypt’s local market, leaving both traders and consumers unsure about the direction of prices — especially mid-month, which coincided with intense political and security uncertainty.
Market Timeline: From Steady Gains to a Spike — Then Decline
During the first week of June, gold held onto its May gains, staying above $3,380 per ounce. However, in the second week, markets reacted to hawkish remarks from Federal Reserve officials, which raised expectations that interest rates may remain elevated longer, placing slight downward pressure on gold.
The turning point came on June 13, when reports of Israeli airstrikes on Iranian sites triggered a swift surge in gold prices, reaching the monthly peak of $3,458 per ounce, as investors flocked to gold as a safe haven amid fears of escalation.
Yet, the rally was short-lived. As signs of de-escalation emerged, prices gradually declined, stabilizing between $3,310 and $3,335 during the final week, before ending the month at $3,274 — shaped by an entangled mix of economic and political factors.
U.S. Politics Shake Confidence: Trump Targets Fed
A major force behind June’s gold volatility was direct political interference in U.S. monetary policy. Former President Donald Trump launched a sharp attack on Fed Chair Jerome Powell, urging immediate rate cuts. In a handwritten note, Trump stated:
“Hundreds of billions are being wasted! And there’s no inflation!”
This intervention sparked concerns over the independence of the Federal Reserve, amplifying market anxiety and prompting some investors to seek refuge in gold.
Trump Tax Bill Adds to the Pressure
Financial concerns were further stoked by the unveiling of the $3.3 trillion “Trump Tax Bill”, with high-profile warnings — including from Elon Musk — that such a move could trigger inflation and weaken the U.S. dollar. Traditionally, this scenario favors gold as a store of value.
Global Trade Tensions and Asian Demand Fuel Hedging Behavior
Meanwhile, markets closely monitored a July 9 deadline set by the White House for reaching partial trade deals with key partners like Japan and the EU. With threats of new tariffs looming, investors increased hedging activity, sustaining strong demand for gold.
In Asian markets, particularly India, seasonal buying picked up by the end of June, according to Reuters, further helping to stabilize global gold prices despite other headwinds.
Outlook: Gold Retains Its Role Amid Growing Uncertainty
Despite fluctuations, gold remained resilient as a trusted safe-haven asset. A monthly report from HSBC projected an average gold price of $3,215 per ounce for 2025, within a trading range of $3,100 to $3,600.
As July unfolds, all eyes are on upcoming speeches by Fed Chair Jerome Powell and ECB President Christine Lagarde. Any shift in tone or policy could once again reshape gold’s trajectory.
Given current dynamics, gold remains well-positioned to benefit from any fresh political or financial shocks, as investors remain on high alert in a market defined by instability and rapid change.
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