Gold Prices Rise Again Despite Easing Trade Tensions

Gold prices rose in local markets during trading on Wednesday, with the ounce rising on the global stock exchange, despite growing hopes for a trade agreement between the United States and the European Union, and amid markets awaiting the minutes of the US Federal Reserve meeting this evening.

Gold prices rose in local markets by EGP 10 during trading today, compared to yesterday's close, with the price of a gram of 21-karat gold reaching EGP 4,630, while an ounce rose by $8, reaching $3,313.

A gram of 24-karat gold reached EGP 5,291, a gram of 18-karat gold reached EGP 3,969, while a gram of 14-karat gold reached approximately EGP 3,087, and the gold pound reached approximately EGP 37,040. Gold prices in local markets fell by EGP 50 during trading yesterday, Tuesday, with the price of a gram of 21-karat gold opening at EGP 4,670 and closing at EGP 4,620. Meanwhile, the ounce fell by $37, opening at $3,342 and closing at $3,305.

Recent gold movements reflect the state of anticipation and caution prevailing in global markets, with the yellow metal recording a significant rise both locally and globally, despite growing optimism regarding an anticipated trade agreement between Washington and Brussels.

The data clearly highlights the return of momentum to the local market, with gold prices in Egypt rising by about EGP 10, while the global ounce rose to $3,313. This rise comes after sharp losses in yesterday's session, reflecting the volatility of global markets and their anticipation of new catalysts. This rise is directly linked to investors' anticipation of the release of the minutes of the US Federal Reserve's meeting this evening, which may carry crucial signals regarding the future of monetary policy and interest rates. With geopolitical tensions looming in the background, gold maintains its appeal as a safe haven, despite pressures stemming from a strong dollar and improved economic confidence indicators in the United States.

These movements indicate a continued "tug of war" in precious metals markets, amid a delicate balance between global economic data and acute political developments.

Gold prices recorded a significant rise during today's trading, driven by increased investment demand amid geopolitical tensions and fluctuations in US dollar indicators. Despite positive signs of a trade rapprochement between the United States and the European Union, gold maintained its upward trend.

US President Donald Trump expressed his "satisfaction" with the 50% tariff imposed on Europe, confirming that Brussels has begun communicating to set a quick date for negotiations, which has boosted hopes that a new trade agreement is imminent. Geopolitical tensions continue to support gold, but it may face headwinds due to the resilience of the dollar and positive economic data.

Russian President Vladimir Putin renewed his demand for written guarantees from NATO regarding restrictions on its eastward expansion, conditioned on a halt to military operations and the lifting of sanctions against Moscow, further stoking concerns in global markets.

Investors' focus this week turns to the minutes of the Federal Open Market Committee's May meeting, due Wednesday evening. The minutes are expected to clarify the reasons for keeping interest rates at a range of 4.25%-4.50%, and warn of potential higher unemployment and inflation as a result of the Trump administration's new economic policies.

Attention is also turning to the April Personal Consumption Expenditures (PCE) price index data—the Federal Reserve's preferred measure of inflation monitoring—due on Friday. The impact is expected to be limited given the lack of clarity on the impact of tariffs on consumer prices. Minneapolis Federal Reserve President Neel Kashkari also supported keeping interest rates steady, emphasizing the "need for patience" amid the uncertainty surrounding new trade policies.

While an improved global economic outlook bolsters optimism about a broad economic recovery, it traditionally reduces demand for safe-haven assets such as gold. This has helped support the US dollar index, which pared gains during European trading but remains far from this month's lows.

A stronger dollar is negatively impacting gold's appeal to investors holding other currencies, a key challenge to the yellow metal's continued rise.

Recent US data also revealed that durable goods orders fell 6.3% in April, a sharp decline but less than the expected -7.9%. The US consumer confidence index rose to its highest level since 2021, supporting the dollar and limiting gold's rise. On the other hand, investors are still betting on a double-digit US interest rate cut this year, which could support gold in the medium term if expectations of slowing inflation and continued geopolitical tensions materialize.