Gold Prices Rise As Markets Await US Inflation Data

Gold prices rose in local markets during trading on Tuesday, with the ounce rising on the global stock exchange, amid markets awaiting US inflation data to determine US monetary policy trends and gold price movements in the coming period.

Gold prices rose in local markets by about EGP 20 compared to yesterday's close, with the price of 21-karat gold reaching EGP 4,625 per gram, while the price of an ounce rose by $7, reaching $3,245.

The price of 24-karat gold reached EGP 5,286 per gram, the price of 18-karat gold reached EGP 3,964 per gram, and the price of 14-karat gold reached EGP 3,084 per gram, while the price of the gold pound reached EGP 37,000 per gram. Gold prices in local markets fell by EGP 110 during trading on Monday. A gram of 21-karat gold opened at EGP 4,715, touched EGP 4,555, and closed at EGP 4,605. Meanwhile, an ounce fell by $87, opening at $3,325, touching $3,215, and closing at $3,238.

Gold prices rebounded, following a sharp decline on Monday following the announcement of a trade agreement between the United States and China.

The sharp drop in gold prices on Monday followed the announcement of a temporary truce between the United States and China regarding tariffs. The United States agreed to reduce import tariffs from 145% to 30%, while China reduced tariffs from 125% to 10%. Markets are concerned about the lack of details in the trade agreement, which could push prices to any of the record highs reached last month. Therefore, the current decline could be a buying opportunity.

The agreement eased trade tensions and fueled a rally in global stock markets, while the dollar rose to a one-month high—two factors that weaken gold's appeal.

Chicago Federal Reserve Bank President Austin Goolsbee warned that current tariff levels will continue to stimulate inflation, according to the New York Times.

Meanwhile, Deutsche Bank issued a report stating that easing trade restrictions on China will not lead to a rapid interest rate cut by the Federal Reserve.

Meanwhile, markets are awaiting the US Consumer Price Index report for April later today, which could shape the Fed's policy outlook. A lower-than-expected CPI reading could ease pressure on the Federal Reserve and weaken the dollar, providing short-term support for gold. However, any upside is likely to reinforce expectations for monetary tightening, boosting yields and negatively impacting gold.

Citibank lowered its three-month gold price target from $3,500 to $3,150, citing reduced geopolitical risks and the potential for short-term stability between $3,000 and $3,300. The bank expects continued demand for exchange-traded funds (ETFs) driven by higher savings, but also noted downward pressure from weak jewelry demand and increased supply.

In related news, markets are awaiting U.S. Producer Price Index (PPI) and retail sales data this week; weekly U.S. jobless claims; the Empire State Manufacturing Survey; the Philadelphia Manufacturing Survey; Federal Reserve Chairman Jerome Powell's remarks in Washington, D.C., on Thursday; and the University of Michigan's preliminary consumer confidence survey on Friday.