Gold prices rebounded on Tuesday in both local and global markets, according to a report by the ISagha platform, supported by expectations that the U.S. Federal Reserve will cut interest rates in 2026, alongside escalating geopolitical tensions in several regions worldwide.
Saeed Emamaby, Executive Director of ISagha, said that 21-karat gold rose by about EGP 80 to EGP 5,940 per gram, while 24-karat gold reached EGP 6,789, 18-karat gold EGP 5,091, and the gold pound EGP 47,520. Globally, gold prices climbed by around $51, with the ounce reaching $4,385.
This rebound followed a sharp 4.5% drop in gold prices on Monday, marking the largest single-day decline since October, prompting investors to rebalance their portfolios.
Silver also posted strong gains at the start of U.S. trading on Tuesday after suffering heavy losses on Monday, signaling a broader recovery in precious metals following an intense wave of selling and profit-taking.
Margin Hikes Drive Volatility
Emamaby noted that higher margin requirements for gold and silver futures imposed by the Chicago Mercantile Exchange (CME) were a key driver behind Monday’s sell-off, as traders were forced to inject additional liquidity to meet delivery obligations.
He added that price declines present a favorable buying opportunity, stressing that periods of fear often offer the best entry points for long-term gains. Current price levels, he said, represent a genuine buying opportunity amid expectations that the upward trend will continue, driven by ongoing central bank purchases and the U.S. Federal Reserve’s accommodative monetary policy.
However, experts believe that any further downside may be limited, particularly given expectations of U.S. interest rate cuts in 2026, which would reduce the opportunity cost of holding gold—an asset that does not generate direct cash returns.
Emamaby also emphasized that persistent global economic uncertainty and geopolitical tensions continue to support traditional safe-haven assets such as gold and silver, noting that trading volumes may remain subdued ahead of the New Year holiday as investors await the release of the Federal Open Market Committee (FOMC) meeting minutes later on Tuesday.
Geopolitical Tensions and Market Impact
In the latest developments, Reuters reported that Russia accused Ukraine of launching a drone attack on the Russian presidential headquarters in the country’s north. Ukraine denied the accusations, describing them as a pretext for further strikes on Kyiv.
Separately, the U.S. military carried out a strike on a facility in Venezuela as part of an anti-drug trafficking operation, killing two smugglers, while U.S. naval forces continued counter-narcotics operations in international waters, according to Bloomberg.
In the Asia-Pacific region, tensions between China and Taiwan escalated after China launched dozens of missiles into waters near Taiwan and conducted live-fire military drills over two consecutive days as part of exercises dubbed “Justice Mission 2025”, simulating a blockade of one of the world’s busiest shipping lanes. China also announced training zones encroaching on Taiwan’s territorial waters and imposed flight restrictions, though international flights largely continued as normal.
Meanwhile, Chinese Foreign Minister Wang Yi called for a new model of positive engagement with the United States, while reaffirming Beijing’s opposition to U.S. arms sales to Taiwan and underscoring that China would not compromise on its core interests, in a bid to stabilize bilateral relations.
Financial Markets and Interest Rates
Global markets saw a slight rise in the U.S. dollar index, while crude oil prices climbed to around $58.50 per barrel. The yield on the 10-year U.S. Treasury note stood at 4.12%.
Interest rate futures indicate a 16.1% probability that the Federal Reserve will cut interest rates at its upcoming January meeting, according to the CME FedWatch Tool, a factor that continues to enhance the appeal of gold and silver as safe-haven assets.
Impact on the Egyptian Market
In Egypt, global price movements were directly reflected in the local market, with gold prices recording notable gains. Investors remain cautious ahead of the New Year holiday, closely monitoring global geopolitical developments and their potential impact on precious metals prices.
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