Gold prices recorded notable gains in both the Egyptian and global markets last week, with domestic prices climbing 1.4% and international prices up 1.2%. The rally was supported by a weaker U.S. dollar, Federal Reserve signals of continued monetary easing, and escalating geopolitical tensions worldwide, according to a report issued by iSagha platform.
Saeed Embabi, CEO of iSagha, said that the price of 21-karat gold in Egypt rose by about EGP 70, starting the week at EGP 4,900 per gram and closing at EGP 4,970. Globally, spot gold jumped by $42 per ounce, opening the month at $3,643, reaching a historic high of $3,707 on September 17, before closing at $3,685.
He added that 24-karat gold stood at EGP 5,680, 18-karat gold at EGP 4,260, while 14-karat gold was priced at EGP 3,314. The gold pound coin stabilized at EGP 39,760.
Global Drivers Behind the Rally
On the global stage, gold’s upward momentum continued, fueled by central bank decisions. The metal posted its fifth consecutive weekly gain after the U.S. Federal Reserve cut interest rates by 25 basis points—a move Fed Chair Jerome Powell described as “risk management” amid labor market pressures.
The week was marked by central bank actions on interest rates, causing volatility in precious metals markets. Yet, gold managed to secure solid gains, placing itself at a new crossroads, with optimism for aggressive rate cuts replaced by heightened focus on upcoming economic data.
By Friday, gold was on track to notch its fifth straight weekly advance, as investors digested the Fed’s quarter-point cut and assessed the trajectory of future monetary policy.
Year-to-Date Performance and Investor Sentiment
Gold prices approached the $3,700 per ounce level last week and have surged nearly 40% so far this year. While some investors seized on the Fed’s cautious return to quantitative easing as a chance to take profits, few expect the rally to peak anytime soon.
Despite gold posting its strongest annual performance since 1979, no analysts have advised investors to scale back holdings. French bank Société Générale even raised its gold allocation to a maximum 10% of its multi-asset portfolio.
Although some view the 40% year-to-date gain as excessive, many analysts believe the bull market remains in its early stages, underpinned by global uncertainty. Some forecasts project gold could reach $4,000 per ounce by late 2025 or early 2026.
Debt, Inflation, and a Flight from the Dollar
Investor appetite for gold remains robust as a hedge against inflation, which is fueled by surging government debt. The U.S. budget deficit rose by $2 trillion this year, pushing national debt beyond $37 trillion. However, the problem extends far beyond America, as nations worldwide grapple with mounting debt burdens.
As a result, gold continues to hit record highs against all major currencies, including the Canadian dollar, British pound, euro, Japanese yen, and Australian dollar. It is currently trading above CAD 5,000 per ounce.
With concerns growing over the Fed’s independence, some investors are seeking alternatives to the U.S. dollar. While the Fed has outlined a moderate path for easing, some analysts see the potential for deeper cuts, particularly in 2026, if President Trump appoints additional dovish policymakers.
The only dissent in last Wednesday’s policy decision came from Stephen Miran, recently appointed by Trump, who advocated for a 50-basis-point cut.
Market Dynamics and Outlook
While some volatility and consolidation are expected, analysts anticipate continued investment demand. Buying dips remains a persistent trend seen over the past three years.
Gold’s weekly gains were reinforced by a post-Fed surge to $3,707 per ounce. However, the Fed also warned of lingering inflationary pressures, raising doubts about the pace of future easing. Minneapolis Fed President Neel Kashkari justified the latest cut on labor market risks but left the door open for more reductions in the next two meetings.
Central banks worldwide are expected to keep accumulating gold as confidence in the dollar wanes and U.S. debt climbs. Analysts stress that these institutions will continue diversifying away from the dollar, with gold as the safest real alternative.
The Fed projected two more rate cuts this year and another in 2026. Still, officials like Stephen Miran pressed for a more aggressive stance, while Kashkari cautioned that stronger inflation and labor markets could even force rate hikes again if necessary.
Market futures currently assign a 91% probability of another 25-basis-point cut at the Fed’s October 29 meeting. Year-to-date, gold has gained over 40%, its strongest annual rally since the late 1970s.
Following the Fed’s latest decision, gold spiked to a record $3,707 before retreating after Powell’s cautious remarks, which lent temporary support to the dollar and weighed on gold at the close. Powell described the move as “risk management”, emphasizing data-driven decisions going forward.
Economic Projections and Trade Flows
The Fed’s updated forecasts show U.S. GDP growth of 1.6% in 2025, 1.8% in 2026, and 1.9% in 2027. Core PCE inflation is expected at 3.1% this year, falling gradually to the 2% target by 2028.
Meanwhile, U.S. customs data revealed that Swiss gold exports to the U.S. plummeted 99% in August after tariffs were imposed, before being reversed by the White House in September. Conversely, exports to China more than tripled to 35 tons, the highest since May 2024, with shipments to India also climbing.
What’s Next
Investors now await a busy week of economic indicators, including S&P Global’s flash PMI data, durable goods orders, jobless claims, GDP figures, and core CPI—the Fed’s preferred inflation gauge. Markets also expect a flurry of Fed speeches to further clarify the monetary policy outlook.
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