Gold prices in local markets recorded strong gains during last week’s trading, supported by a similar rise on global exchanges. Prices increased by about 1.9%, in line with an almost identical rise in global gold prices, amid escalating geopolitical tensions and political instability that pushed the yellow metal to new record levels, according to a report issued by the iSagha platform.
Saeed Imbaby, Executive Director of the platform, said that gold prices in the local market rose by about EGP 115 over the week, with 21-karat gold opening trading at EGP 6,040 per gram and closing the week at EGP 6,155.
Globally, gold jumped by about $86 per ounce, starting the week at $4,510 and closing at $4,596 per ounce.
Imbaby explained that 24-karat gold was priced at around EGP 7,034 per gram, while 18-karat gold reached approximately EGP 5,276 per gram. The gold pound rose to about EGP 49,240.
He noted that gold prices have increased by around EGP 325 since the beginning of the year, representing growth of 5.6%, compared with gains of 4.3% recorded in January of last year.
On the global exchange, gold prices rose by about $278, equivalent to 6.4%, approaching the January gain recorded last year of around 6.6%.
Sharp Volatility and Record Moves
Geopolitical tensions and domestic political unrest pushed gold prices to record highs during the week, as volatility returned strongly to precious metals markets.
Gold began the week trading at $4,510 per ounce. As reports circulated regarding a lawsuit by the U.S. Department of Justice against the Federal Reserve, prices surged sharply to $4,600.
After a limited pullback to $4,582, volatility returned amid escalating political pressure on the Federal Reserve, pushing gold rapidly higher to $4,616, before retreating to $4,586 and then rebounding again to $4,630 per ounce.
Gold traded sideways on Tuesday and Wednesday within a range of $4,580 to $4,630, before staging a strong rally on Wednesday afternoon to reach a weekly high of $4,640 per ounce.
Prices later entered a phase of relative stability, with the yellow metal fluctuating between $4,585 and $4,620.
Friday’s session saw sharp volatility, as gold once again failed to break above the $4,620 level, triggering a strong decline to a weekly low of $4,536, before rebounding toward $4,600 per ounce by the end of the week.
Profit-Taking and Dollar Pressure
Gold prices fell by more than 1% during Friday’s trading, as investors moved to take profits after the strong rally, while the metal’s appeal as a safe haven weakened amid easing geopolitical tensions.
These moves were driven by profit-taking, alongside the release of U.S. data showing resilience in the labor market, contrary to expectations. This reinforced doubts about the Federal Reserve implementing two interest rate cuts, a shift that was clearly reflected in swap markets.
This pullback is significant, as the recent rally in gold was largely driven by expectations that U.S. borrowing costs had peaked.
Gold typically comes under pressure when the dollar strengthens and U.S. Treasury yields rise, as it is a non-yielding asset.
Gold also retreated as U.S. economic data improved and geopolitical risks eased, prompting investors to scale back bets on broad monetary easing by the Federal Reserve.
Federal Reserve Statements and Economic Data
Market sentiment turned cautious following remarks by U.S. President Donald Trump regarding the Federal Reserve chairmanship, amid uncertainty over his nomination of National Economic Council Director Kevin Hassett for the position.
On the geopolitical front, risk premiums declined following reports that Israeli Prime Minister Benjamin Netanyahu had asked Trump to delay any potential strike on Iran, in an effort to gain more time to prepare for a possible Iranian response.
Economically, Federal Reserve data showed U.S. industrial production rose by 0.4% in December, beating expectations that had pointed to a 0.1% decline. Inflation data also presented a mixed picture, with the annual Consumer Price Index holding steady at 2.7%, while the Producer Price Index accelerated to 3%, reflecting persistent cost pressures in the production sector.
The U.S. labor market showed resilience, with the unemployment rate falling to 4.4% and initial jobless claims declining to 198,000, reinforcing the Federal Reserve’s stance on delaying interest rate cuts.
Despite some Federal Reserve officials emphasizing the need to continue monetary easing, traders have scaled back expectations. Estimates now point to total rate cuts of only about 43 basis points by the end of 2026, with weak odds of a rate cut at the January meeting.
Market Outlook
Imbaby stated that fundamental factors remain supportive of gold prices, amid concerns over the independence of the Federal Reserve, ongoing trade tensions, and continued gold purchases by central banks.
He added that any U.S. military escalation against Iran could push prices to higher levels, suggesting that gold could exceed $4,700 per ounce during the current month.
Markets are awaiting the Federal Reserve’s monetary policy decisions scheduled for January 27–28, along with key U.S. economic data, including housing indicators, jobless claims, the final reading of GDP, the Personal Consumption Expenditures index, as well as purchasing managers’ indices and consumer confidence data, amid expectations that volatility will persist in gold and precious metals markets.
Follow the latest news on Google News
