Gold prices reduce losses in local and global markets after U.S. decision to suspend attacks on Iranian energy facilities

Gold prices in the local market and global bullion exchange reduced their losses during Monday’s trading after U.S. President Donald Trump announced that he had instructed the Department of War to suspend military attacks on Iranian energy facilities for five days, according to a report issued by the iSagha platform.

Said Embabi, CEO of the iSagha platform, stated that gold prices recovered part of their losses by about EGP 65, with the price of 21-karat gold reaching EGP 6,850 after previously falling to EGP 6,700. Meanwhile, gold ounce prices declined by about $65 to record $4,432 after touching the $4,100 level.

Embabi added that 24-karat gold recorded around EGP 7,829, 18-karat gold reached EGP 5,872, while the gold pound recorded approximately EGP 57,800.

Gold prices in the local market had fallen by about EGP 510 during the past week, as 21-karat gold opened trading at EGP 7,425 and closed at EGP 6,915. Globally, gold fell by about $524 per ounce, starting the week at $5,021 and closing at around $4,497.

Gold recovered from early losses and posted slight gains after President Trump announced in a post on Truth Social that he had instructed the Department of War to postpone all military strikes on Iranian energy facilities and energy infrastructure for five days, pending the success of ongoing discussions and negotiations.

Trump stated that the United States and Iran had held productive and constructive discussions over the past two days aimed at reaching a comprehensive resolution to disputes in the Middle East, and based on these discussions, the decision was made to delay the planned strikes.

The announcement of suspending the attacks on Iranian energy facilities improved investors’ risk appetite, which led to a noticeable decline in the U.S. dollar and oil prices, helping gold reduce part of its losses.

Embabi explained that the recent sharp decline in gold prices has raised questions among investors and savers about whether this decline represents a buying opportunity or whether larger factors are still putting pressure on the market. He noted that the current decline is not due to a single factor but rather a combination of economic and financial factors occurring at the same time.

He pointed out that the strength of the U.S. dollar is one of the main reasons for the decline in gold, due to the inverse relationship between gold and the dollar. When the dollar rises, gold typically declines, and vice versa. Recently, the dollar received support from economic expectations and monetary policy, which put direct pressure on gold prices.

He added that tensions related to vital shipping routes such as the Strait of Hormuz contributed to rising global oil prices, which created tension in financial markets. In some cases, liquidity moves to energy markets and the dollar instead of gold, causing gold to decline despite geopolitical crises.

He also noted that rising U.S. bond yields were another important factor, as investors tend to move their funds into bonds that offer fixed returns rather than gold, which does not generate yield, leading to increased selling pressure on gold.

Gold’s decline also came after a strong rally in the previous period, which prompted some investors to sell gold to take profits, accelerating the decline in what is known in markets as a price correction after a rally.

Embabi believes the current decline may be a natural correction within an upward trend in the medium and long term rather than a change in the overall trend of gold, especially with several supportive factors still in place, including continued central bank gold purchases, ongoing geopolitical tensions, expectations of future interest rate cuts, and continued demand for gold as a safe haven.

Market participants advise against buying or selling with full liquidity at once, recommending instead gradual buying and selling in stages to reduce risks, benefit from price volatility, and build an appropriate average price.

Market developments indicate that the current gold decline is driven by the strong dollar, rising bond yields, tensions in energy markets, and profit-taking, while many market participants believe that periods of fear and price declines often represent long-term buying opportunities, provided that investment decisions are made carefully.

Globally, gold prices witnessed a sharp decline recently, with spot gold falling to around $4,100 per ounce at one point, recording a daily drop exceeding 5% and marking one of the largest declines in decades amid pressure from rising oil prices and increasing concerns about persistent inflation and tighter monetary policy.

High energy prices increased global inflation pressures, which led markets to reduce expectations for U.S. interest rate cuts, pushing real yields and the U.S. dollar higher, which in turn pressured gold prices, as gold is negatively affected by higher interest rates.

Profit-taking, liquidation in futures markets, and outflows from gold-backed ETFs also contributed to accelerating the decline, especially after the historic rally gold experienced last year.

Despite short-term pressure, many forecasts still indicate that the overall trend for gold remains positive in the medium term, with continued volatility expected in the coming period, particularly as markets await key U.S. economic data, including PMI indicators, current account data, jobless claims, and wholesale inventories, which are expected to influence global gold prices.