Gold Prices Rise on Weaker Dollar and Lower Oil Prices

Gold prices rose in both local and global markets during Thursday’s trading session, supported by a weaker U.S. dollar, lower oil prices, and geopolitical developments in the Middle East, according to a report issued by the Marsad Al Dahab for Economic Studies.

The report stated that the price of 21-karat gold increased by EGP 20 compared with Wednesday’s close, reaching EGP 6,620 per gram, while gold prices on international markets climbed by $27 per ounce to $4,472.

Meanwhile, 24-karat gold traded at approximately EGP 7,566 per gram, 18-karat gold reached EGP 5,674 per gram, and the gold sovereign recorded EGP 52,960.

The report noted that gold had declined during Wednesday’s trading, with 21-karat gold losing EGP 55 per gram, falling from EGP 6,655 to EGP 6,600. Globally, the ounce fell by $44, closing at $4,445 after opening at $4,489.

Egyptian Tax Authority Clarifies Manufacturing Fee Adjustments

The Marsad Al Dahab emphasized that the recent announcement by the Egyptian Tax Authority confirms what the Observatory had previously reported regarding the amendments scheduled to take effect in July 2026.

According to the report, the changes relate solely to the mechanism for calculating Value Added Tax (VAT) on manufacturing charges and do not constitute a new increase in the actual manufacturing fees charged on gold jewelry.

The report explained that the Egyptian Tax Authority has no jurisdiction to determine, increase, or reduce jewelry manufacturing fees, as these are commercial costs set by manufacturers and producers according to production expenses and market conditions. The Authority’s role is limited to determining the VAT applied to manufacturing charges under the tax accounting protocol governing the gold sector.

The report further noted that the market had already witnessed actual increases in manufacturing fees during June, implemented by manufacturers. These increases amounted to approximately EGP 30 per gram for 21-karat jewelry and EGP 60 per gram for 18-karat jewelry, reflecting higher production costs, energy expenses, labor costs, and industrial inputs. These increases were commercial decisions and were not issued by any government authority.

According to the Observatory, confusion arose because many market participants failed to distinguish between actual manufacturing fees charged by producers and retailers and the accounting averages used solely for VAT calculations.

The report stressed that there is no unified manufacturing fee in the gold market, as charges vary depending on the manufacturer, product type, gold purity, craftsmanship level, production technology, brand value, operating expenses, and labor costs.

Based on the Observatory’s calculations, the accounting manufacturing fee for 21-karat gold will increase from EGP 59 to approximately EGP 64.41 per gram, resulting in VAT rising from around EGP 8.20 to approximately EGP 9.00 per gram. 

For 18-karat gold, the accounting manufacturing fee will increase from EGP 88 to approximately EGP 96.64 per gram, raising VAT from roughly EGP 12.30 to EGP 13.50 per gram. These adjustments do not impose any mandatory increase on the actual manufacturing fees paid by consumers.

Global Market Developments

Internationally, gold surrendered part of its intraday gains but remained close to a one-week low. The precious metal benefited from a softer U.S. dollar following the announcement of a ceasefire agreement between Israel and Lebanon, brokered by the United States, which encouraged profit-taking on the dollar.

However, investors continue to monitor developments surrounding Iran, as diplomatic negotiations between Washington and Tehran remain stalled over frozen assets and nuclear-related issues. These unresolved tensions continue to support safe-haven demand for gold.

Markets are also closely watching U.S. monetary policy expectations. Persistent expectations for higher interest rates continue to support the dollar and limit gains for non-yielding assets such as gold.

Traders are awaiting weekly U.S. jobless claims data and remarks from Federal Reserve officials ahead of Friday’s closely watched Non-Farm Payrolls (NFP) report, which is expected to provide important clues regarding future interest-rate policy.

Central Banks Resume Gold Purchases

In a related development, the latest report from the World Gold Council showed that central banks returned to net gold purchases in April 2026 after becoming net sellers in March.

According to the report, central banks added a net 17 tonnes of gold during April, led by purchases from Poland, China, and the Czech Republic, while Russia continued reducing its gold holdings.

The survey also highlighted strong confidence in gold among central banks, with 95% of respondents expecting global official gold reserves to increase over the next 12 months. Additionally, 43% of central banks indicated plans to increase their own gold reserves.

Gold Strengthens Its Position in Global Reserves

Commenting on the European Central Bank’s annual report, the Gold Observatory noted that gold’s rise above U.S. Treasury securities within official global reserve holdings represents an important shift in the composition of international reserves. However, it does not signal the end of the U.S. dollar’s dominance as the world’s primary reserve currency.

The report noted that gold now accounts for approximately 27% of total official global reserves, compared with 22% for U.S. Treasury securities. This development has been driven by the strong rally in gold prices during 2024 and 2025, continued central-bank purchases, and growing geopolitical and economic uncertainties worldwide.

The Observatory concluded that the current trend reflects a broader diversification and rebalancing of reserve assets rather than a replacement of the U.S. dollar. Gold continues to strengthen its role as a store of value and a hedge against uncertainty, while central banks seek greater resilience in their reserve portfolios amid evolving global economic conditions.