Gold prices recorded a modest rise in both local and global markets at the end of the week, with the international spot price posting a weekly gain of approximately 0.9%, supported by persistent geopolitical tensions in the Middle East. Investors are now turning their attention to next week's U.S. Federal Reserve meeting, which is expected to provide fresh guidance on monetary policy and the near-term outlook for gold.
The price of 21-karat gold in the local market increased by around EGP 10 compared with the previous close, reaching approximately EGP 5,990 per gram. Meanwhile, the international gold price ended the week at US$4,053 per ounce, gaining US$36 over the course of the week.
Other local prices stood at approximately EGP 6,846 for 24-karat gold, EGP 5,134 for 18-karat gold, while the gold sovereign reached around EGP 47,920.
Friday's trading session saw only limited movement. The price of 21-karat gold opened at EGP 5,970 per gram before closing at EGP 5,980, while the international gold price edged up by just US$1, from US$4,052 to US$4,053 per ounce.
Local Market Performance: Exchange Rate and Premiums Drive Gains
Since the beginning of July, the international gold price has risen by US$36, or 0.9%, compared with the end of June, when it closed at US$4,017 per ounce. Over the same period, Egypt's 21-karat gold price has climbed by approximately EGP 305 per gram, representing a 5.4% increase from EGP 5,685 at the end of June.
The stronger performance of the local market has been driven by two key factors:
The appreciation of the official U.S. dollar exchange rate, which increased from approximately EGP 48.92 at the beginning of July to around EGP 51.42, a gain of more than 5%.
The widening local price premium, which has risen to around EGP 150 per gram, reflecting a larger gap between domestic prices and the fair value implied by global gold prices and the official exchange rate.
On a year-to-date basis, international gold remains down by around US$265, or 6.1%, from its opening level of US$4,318 per ounce. In contrast, Egypt's 21-karat gold price has increased by approximately EGP 160 per gram, or 2.7%, from its opening level of EGP 5,830.
Global Market Outlook: Focus on the Federal Reserve
Despite improving physical demand, gold continues to be heavily influenced by movements in the U.S. dollar and interest rate expectations. The recent recovery in the U.S. dollar alongside higher real Treasury yields has limited gold's upside, as rising yields enhance the attractiveness of income-generating assets relative to non-yielding bullion.
Financial markets are now focused on the Federal Reserve meeting scheduled for 29 July. Current market expectations suggest a 59% probability that the Fed will leave interest rates unchanged, while a 41% probability is assigned to a 25-basis-point rate increase.
Recent U.S. economic data presented mixed signals. S&P Global's Manufacturing PMI slipped marginally from 53.9 to 53.8, below expectations of 54.5, while the Services PMI rose from 51.2 to 53.6, comfortably exceeding forecasts of 51, supported by stronger tourism and services activity.
The relationship between inflation and gold will continue to depend largely on the Federal Reserve's policy response. Should inflation remain persistently high while economic conditions weaken, expectations for future monetary easing could strengthen, increasing gold's appeal as a hedge against stagflation risks.
However, such a scenario is likely to involve periods of heightened volatility and price corrections, making disciplined, long-term investment strategies more important than reacting to short-term market fluctuations.
China Raises Gold Imports to a Two-Year High
In a development supportive of global demand, Chinese customs data showed that gold imports reached approximately 173 tonnes in June, the highest level since March 2024, up from around 163 tonnes in May, marking the third consecutive monthly increase.
The rise reflects lower international gold prices during recent months, the strength of the Chinese yuan, and increased purchases by Chinese banks following higher import quotas to meet growing investor demand for bullion and gold savings products.
New Technology Enhances Supply Chain Transparency
The World Gold Council also highlighted a significant advancement in responsible sourcing during the latest episode of its Unearthed podcast. The discussion focused on the growing adoption of XTrace, a technology combining X-ray spectroscopy and artificial intelligence to identify the chemical fingerprint and geographic origin of gold shipments in less than one minute.
The technology is expected to strengthen supply chain transparency and support responsible sourcing practices, particularly within the artisanal and small-scale mining sector, which accounts for approximately 20% of global gold production.
Global gold markets are entering a pivotal week as investors await the Federal Reserve's policy decision. Market sentiment will continue to be shaped by monetary policy expectations, U.S. dollar performance, real Treasury yields, geopolitical developments, and resilient physical demand from China.
Although gold prices are likely to remain volatile in the near term, sustained investment demand, ongoing central bank purchases, and geopolitical risks continue to provide strong medium- and long-term support. Nevertheless, the direction of the U.S. dollar and the Federal Reserve's policy decisions are expected to remain the primary drivers of short-term price movements.
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