Gold prices witnessed a slight increase in the local markets during Monday’s trading, with a slight increase in an ounce gold ounce price on the global stock exchange, amid investors’ anticipation of the US Federal Reserve’s decisions on Wednesday and Thursday.
Gold prices dropped on Tuesday to their lowest since mid-February, as an elevated dollar and an imminent interest rate hike by the U.S. Federal Reserve dampened bullion's appeal as an inflation hedge. Spot gold was down 0.5% at $1,854.21 per ounce, as of 0816 GMT, its lowest level since Feb. 16.
Said Imbabi, Executive Director of the “i-Sagha” digital platform of gold and jewelry online trading, said that gold prices rose by about EGP2 during today’s trading in the local markets, as the 21-karat recorded EGP 988.
He added, that a gram of 24-Karat recorded EGP1130, 18-karat recorded EGP839, 14-karat is sold at EGP659, and a pound of gold recorded EGP 7904 .
Imbabi indicated that interest rates have become the most powerful factor influencing the movement of gold prices, in light of the major central banks’ tendency to tighten monetary policy, and raise interest rates to counter inflation.
Moreover, he continued that the US Federal Reserve is expected to raise interest rates at the Monetary Policy Committee meeting on Wednesday and Thursday, by 75 basis points, or perhaps 100 points, while the European Central Bank raised interest rates during the past week by about 50 basis points to reduce inflation rates.
He added that European Central Bank President Christine Lagarde's recent statements about the bank’s decision to raise interest rates until inflation drops to the level of 2%, will have an impact on the movement of gold prices during the coming period.
Imbabi pointed out that gold is a tool for hedge against high inflation rates, and a safe haven against currency erosion, in times of crises and economic uncertainty.
Contributed by Nada Mustafa
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