Gold markets, both locally and internationally, witnessed a strong rally over the past week. In Egypt, prices rose by 3.7%, while spot gold on the global exchange gained 4%, driven by increased demand for safe-haven assets amid heightened geopolitical and economic uncertainty, along with growing expectations that the U.S. Federal Reserve will cut interest rates due to labor market weakness.
According to the weekly report issued by iSagha, an online platform for gold and jewelry trading, the price of 21-karat gold in Egypt climbed by EGP 175 per gram. It began the week at EGP 4,690, peaked at EGP 4,890, and closed at EGP 4,865. Globally, spot gold surged by $140, opening the month at $3,447 per ounce, hitting an all-time high of $3,600 on September 5, before closing at $3,587.
Local Market Indicators
Saeed Embabi, CEO of iSagha, reported that 24-karat gold reached EGP 5,560, 18-karat gold stood at EGP 4,170, while 14-karat recorded EGP 3,244. The gold pound coin settled at EGP 38,920.
Embabi added that the local market has been witnessing a wave of heavy reselling by citizens, whether in jewelry or bullion, as many sought to capitalize on record-high prices and secure quick profits. This trend reduced liquidity in the market, prompting bullion traders to cut prices by nearly EGP 50, with large amounts of resold gold being directed toward exports.
He noted that selling gold without a genuine need for liquidity amounts to an indirect loss for citizens, stressing that holding on to gold remains the most effective hedge under persistent inflation and global economic uncertainty.
Future Price Outlook
Embabi pointed out that international financial institutions expect gold prices could approach $5,000 per ounce in the coming period. Should the U.S. dollar exchange rate return to EGP 50, the price of 21-karat gold in Egypt could jump into the range of EGP 7,000 to 8,000 per gram.
He further explained that local gold prices are primarily determined by three factors:
The international spot gold price.
The USD/EGP exchange rate.
Supply and demand dynamics in the local market.
The recent decline in the U.S. dollar, which slipped to EGP 48.45 at the Central Bank of Egypt, helped to slow down the pace of gold price increases.
Liquidity Pressures and Deferred Payment System
Embabi revealed that liquidity shortages at retail outlets have pushed some traders to adopt a deferred payment system, whereby payment for sold gold is postponed and charged at a premium above the spot market price. This practice is expected to drive retail gold prices higher in the coming days, as shops attempt to offset these price differentials.
Global Market: An Extraordinary Moment
The report highlighted that gold’s surge to $3,600 per ounce was not just a price swing but rather reflected an extraordinary period of global uncertainty, fueled by tariff disputes, monetary easing expectations, mounting U.S. debt concerns, and intensifying debate over the independence of the Federal Reserve.
U.S. Jobs Data Boost Gold
Gold prices spiked globally after the release of nonfarm payrolls data in the U.S., which showed significant labor market weakness. The economy added only 22,000 jobs in August, far below expectations of 75,000. The unemployment rate rose to 4.3% from 4.2% a month earlier, while wage growth remained unchanged at 0.3% month-on-month.
These figures dragged the U.S. dollar down by 0.70% to a DXY index level of 97.57, while the two-year U.S. Treasury yield dropped by 11 basis points to 3.48%, boosting gold’s safe-haven appeal.
Interest Rate Expectations and Monetary Policy
According to the report, analysts at Standard Chartered Bank expect the Federal Reserve to cut interest rates by 50 basis points in September, citing weak employment data, alongside likely downward revisions to figures from April 2024 to March 2025.
Fed funds futures contracts for December 2025 indicate a total of 68 basis points of cuts priced in by year-end. Markets currently assign an 86% probability of a 25-basis-point cut in September and a 14% chance of a larger 50-basis-point cut.
Meanwhile, U.S. Treasury yields continued to fall, with 10-year bonds dropping more than 8.5 basis points to 4.076%, while real yields — adjusted for inflation expectations — slipped 9 basis points to 1.696%.
Inflation Data in Focus
Investors are now eyeing the release of U.S. consumer price index (CPI) data next week, which will play a decisive role in shaping Fed policy at its meeting on September 16–17. A further slowdown in inflation would heighten the odds of a rate cut and could propel gold to fresh record highs.
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