Gold prices in the local market recorded notable gains during last week’s trading, rising by around 2.5%, in parallel with an increase of nearly 4% in global gold prices. The advance came amid growing expectations that the Federal Reserve is moving toward cutting interest rates, following the release of weak U.S. economic data, according to a report issued by the iSagha platform.
Saeed Embaby, Executive Director of iSagha, said that gold prices in the domestic market increased by about EGP 150 over the week. The price of 21-karat gold opened trading at EGP 5,890 per gram and closed the week at EGP 6,040.
Globally, gold prices jumped by about USD 178 per ounce, starting the week at USD 4,332 and ending at USD 4,510.
Embaby explained that the price of 24-karat gold reached around EGP 6,903 per gram, while 18-karat gold stood at approximately EGP 5,177 per gram. The gold pound rose to about EGP 48,320.
He noted that local prices traded at a premium to global prices, driven by stronger demand and a shortage of supply, as a number of raw gold shops closed in conjunction with the Christmas holidays. In addition, traders moved to hedge their positions amid expectations of further gains at the start of the current week, following statements by the U.S. president that contributed to heightened geopolitical tensions.
Over the course of 2025, gold achieved strong annual gains in the local market of around 56%, an increase of nearly EGP 2,090. Globally, gold prices rose by 65% during the year, equivalent to about USD 1,694 per ounce.
Central bank purchases, risks related to tariffs and global trade, strong activity in the options market, and the weakness of the U.S. dollar were among the key factors supporting gold’s performance over the year.
Support for gold relies less on actual supply tightness and more on its broader macroeconomic role, as a hedge and diversification tool. This is underpinned by sustained demand from central banks and increased investment demand during periods of political uncertainty, especially given the continued high correlation between equity and bond markets.
Analysts point to a direct relationship between gold and geopolitical risks, noting that a 100-point rise in the geopolitical risk index leads to an approximate 2.5% increase in gold prices in the short term, while the long-term impact depends on the sustainability of events and their economic repercussions.
Upcoming U.S. Supreme Court rulings on tariffs carry significant implications for U.S. trade policy. While their impact on gold may be more complex, it is broadly expected to be supportive for the precious metal.
Moreover, the expansion of geopolitical flashpoints—most recently U.S. moves in Venezuela—has enhanced gold’s appeal as a safe haven, reinforcing its status as a preferred hedging asset during periods of uncertainty.
Gold prices also rose toward the end of last week following the release of a mixed U.S. labor market report, which showed job gains below expectations. This strengthened investor bets that the Federal Reserve will move toward cutting interest rates in the coming period, despite a slight decline in the unemployment rate.
Although short-term rate-cut expectations were negatively affected by some economic data, traders continue to expect the Federal Reserve to cut interest rates by around 50 basis points over the year.
Data showed that non-farm payrolls for December came in below expectations, along with a downward revision to November figures. Meanwhile, the unemployment rate declined, and average hourly earnings data came in line with estimates.
Housing data also pointed to continued slowdown, with building permits and housing starts declining in October compared with November. At the same time, the preliminary reading of the University of Michigan’s consumer sentiment index for January exceeded expectations, despite persistent concerns among U.S. households about medium-term inflation.
Markets are awaiting the release of a series of key U.S. economic indicators in the coming week, including inflation data, retail sales, regional manufacturing indices, jobless claims, and speeches by Federal Reserve officials.
In light of these developments, investors have increased their expectations that the Federal Reserve will cut interest rates by around 56 basis points in 2026.
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