Gold Prices Jump by EGP 580 in One Week, Up EGP 905 Since the Start of the Year

Rising Demand and Supply Shortages Push the Gap Between Local and Global Prices to EGP 146

Gold prices in the local market recorded a sharp increase during last week’s trading, rising by 9.4%, supported by a strong rally in global spot prices, where gold gained about 8.5%—its strongest weekly performance in nearly six years—amid rising demand and escalating geopolitical and political tensions worldwide, according to a report issued by the iSagha platform.

Saeed Embabi, Executive Director of iSagha, said that local gold prices rose by approximately EGP 580 over the week, with 21-karat gold opening trading at EGP 6,155 per gram and closing the week at EGP 6,735.

Globally, gold prices surged by around USD 392 per ounce, starting the week at USD 4,596 and closing at USD 4,988.

Embabi noted that 24-karat gold recorded about EGP 7,697 per gram, while 18-karat gold reached approximately EGP 5,773 per gram. The price of the gold pound rose to around EGP 53,880.

He added that since the beginning of the year, gold prices have increased by about EGP 905, representing a growth rate of 15.5%. On the global exchange, gold prices have risen by nearly USD 670 since the start of the year, reflecting the same percentage gain.

Embabi pointed out that the local market is witnessing a severe shortage in the supply of gold and silver bars due to surging demand, particularly amid the continued suspension of imports for companies. The market has increasingly relied on resale operations, many of which targeted exports of large quantities in recent months, leading to a noticeable decline in local supply.

He explained that the supply shortage has forced manufacturers to rely on traders’ gold, resulting in extended delivery times of up to two weeks.

Embabi advised consumers to turn toward gold jewelry as a means of adornment and savings simultaneously, which could help ease pressure on gold bars. He stressed the importance of choosing jewelry with reasonable manufacturing costs that can be offset by potential future price increases.

He emphasized that the rise in local gold prices is primarily driven by higher global prices, alongside relative stability in the local exchange rate and increased domestic demand, which together widened the gap between local and global prices to about EGP 146.

Global Gains Driven by Safe-Haven Demand and a Weak Dollar

Gold posted strong gains in global markets last week, supported by increased demand for safe-haven assets amid ongoing geopolitical and economic uncertainty worldwide, in addition to the continued weakness of the U.S. dollar.

Analysts believe that U.S. President Donald Trump’s trade policies, particularly his reliance on tariffs as a political pressure tool, have eroded investor confidence in U.S. assets, heightening concerns about the dollar and driving investors toward gold.

Although geopolitical tensions eased slightly midweek after President Trump announced a retreat from earlier threats to impose tariffs on European countries following the announcement of a future framework agreement regarding Greenland, the lack of binding details limited the impact of this development on gold prices.

Investors continue to approach these developments with caution amid doubts over the ability to fully contain tensions, keeping demand for the precious metal elevated.

On the monetary policy front, recent economic data strengthened expectations that interest rates will remain unchanged at the Federal Reserve’s meeting scheduled for January 27–28, with expectations that the current policy stance will persist throughout the first quarter of the year.

In this context, Trump announced the conclusion of interviews to select the next Chair of the Federal Reserve, with expectations that a decision will be announced before the end of January. This has raised concerns that a new appointment could lead to a more accommodative monetary policy, particularly given Trump’s repeated criticism of current Chair Jerome Powell over the pace of interest rate cuts.

Data from the University of Michigan’s January survey showed an improvement in consumer sentiment, with the Consumer Expectations Index rising to 57 from 55, while the Consumer Sentiment Index increased to 56.4 from 54.

Meanwhile, one-year inflation expectations declined to 4% from 4.2%, while five-year inflation expectations fell to 3.3% from 3.4%. Core Personal Consumption Expenditures (PCE) inflation remained steady at 2.9%, while initial jobless claims rose to 200,000.

The precious metals sector continues to gain strong momentum at the start of the year, with silver prices surpassing USD 100 per ounce and gold approaching the USD 5,000 level. Despite some signs of overbought conditions, analysts emphasize that the current rally is supported by solid fundamental factors.

Despite a relative easing in geopolitical tensions, political pressure from the United States on the European Union remains in place, prompting some European institutions to reassess their holdings of U.S. Treasury bonds.

Analysts argue that current gold price levels appear justified in light of ongoing accumulation by central banks and persistent geopolitical risks, suggesting that the current movement resembles a devaluation of currencies rather than a speculative bubble.

Bank of America Raises Gold Target to USD 6,000

As gold approaches the USD 5,000-per-ounce threshold, Bank of America has raised its short-term price target to USD 6,000 per ounce, making it the most bullish among major financial institutions.

Global markets are awaiting a series of key economic data releases in the coming week, including U.S. durable goods orders, the Consumer Confidence Index, weekly jobless claims, and the U.S. Producer Price Index.

Investor focus will also be directed toward monetary policy decisions by both the Bank of Canada and the U.S. Federal Reserve, given their direct impact on the U.S. dollar and precious metals prices, particularly gold.