Gold Prices Hold Steady Locally Despite U.S. Government Shutdown and Global Market Volatility

Gold prices remained stable in local markets during Saturday’s trading session, coinciding with the weekend closure of global exchanges. The metal ended the week with a slight dip of about $2 per ounce, closing at $4,001, according to a report issued by “iSagha”, the online gold and jewelry trading platform.

According to Saeed Embabi, CEO of iSagha, local gold prices were unchanged compared to Friday’s closing levels. 21-karat gold recorded EGP 5,345, while the ounce settled at $4,001, down by $2 from the previous week. He added that 24-karat gold stood at EGP 6,109, 18-karat at EGP 4,581, and the gold pound coin stabilized at EGP 42,760.

Embabi noted that the local market’s stability comes amid global uncertainty after two consecutive weeks of sharp declines. Despite profit-taking and selling pressure, gold managed to stay above the $4,000 per ounce level, supported by mounting concerns over the prolonged U.S. government shutdown and fears of a potential economic slowdown.

Gold Gains from U.S. Economic Concerns

Global gold markets ended the week on a mixed note, as weak economic data and declining consumer confidence increased demand for safe-haven assets.

Data from the University of Michigan showed that U.S. consumer sentiment fell in November to its lowest level since June 2022, amid growing worries about the prolonged government shutdown. Meanwhile, the Federal Reserve is now expected to cut interest rates in December with a 68% probability, according to the CME FedWatch Tool.

The iSagha report highlighted growing signs of a slowdown in the U.S. labor market ahead of the Fed’s upcoming policy meeting. A report by Challenger, Gray & Christmas showed that employers cut more than 150,000 jobs in October—the highest in over two decades—while ADP data revealed only 42,000 new private-sector jobs for the month.

White House economic adviser Kevin Hassett told CNN that the government shutdown is hurting the economy more than expected, estimating a 1%–1.5% decline in GDP growth for the current quarter.

Meanwhile, Federal Reserve Vice Chair Philip Jefferson stated that “the Fed should proceed gradually with rate cuts as monetary policy approaches a neutral level,” adding that policy decisions will be made “meeting by meeting,” given the potential lack of government data due to the shutdown.

ETFs and Central Banks Sustain Gold Demand

The World Gold Council (WGC) reported that gold-backed exchange-traded funds (ETFs) recorded net inflows of 54.9 tons in October, led by strong demand from North America and Asia, while Europe saw net outflows.

Central banks also continued building their reserves, purchasing a combined 39 tons in September, bringing total net purchases since the start of the year to 200 tons.

Brazil topped the list of buyers with 15 tons, followed by Kazakhstan and Guatemala. Poland continued to expand its reserves, reaching 530 tons, while the People’s Bank of China increased its holdings to 2,304 tons, despite a slower pace of accumulation in October.

Market Outlook

Analysts believe gold retains strong medium-term upside potential, supported by growing expectations of rate cuts, a weaker U.S. dollar, and continued central bank diversification away from dollar-denominated assets.

With the U.S. government shutdown ongoing and key inflation and retail sales data delayed, experts expect gold to remain firm above $4,000 per ounce, with the potential for further gains if the Federal Reserve moves ahead with rate cuts next month.

Despite the prevailing political and economic uncertainty in the United States, gold continues to act as a primary safe-haven asset, holding above the critical $4,000 level, as markets await fresh signals that could determine the metal’s trajectory in the coming weeks.