Gold Prices Stabilize in Local Market, Near 17% Rise in 2024

Gold prices stabilized in local markets during Tuesday's trading, with the ounce rose slightly on the global stock exchange.

The state of stability comes amid slow sales coinciding with Christmas celebrations and markets' anticipating the potential impact of President-elect Donald Trump's return to office in the coming year, which concerns clashes with the US Federal Reserve over interest rates.

Said Imbabi, Executive Director of the “i-Sagha”, said that gold prices stabilized in local markets during the transactions compared to the end of yesterday’s trading, in which the gram of 21-karat gold recorded EGP 3720 and the ounce rose on the global stock exchange by about $5, to record $2612.

He added that the 24-karat gold reached EGP 4251, 18-karat registered EGP 3189, 14-karat gold sold at EGP 2480, and the gold pound hit EGP 29760.

On the other hand, gold prices declined in the local markets by EGP 15 during yesterday's trading.

The 21-karat opened trading at EGP 3735 and closed at EGP 3720. Meanwhile, the ounce declined on the global stock market by $14, with transactions beginning at $2622, touching $2599, and closing at $2607.

Gold prices in local markets are heading towards achieving gains of 17.3% in 2024. 

The 21-karat gold opened the year's trading at EGP 3175 and touched EGP 4200 at the end of January trading.

Moreover, global markets are awaiting the impact of Trump's return to the presidency in the United States, which will undoubtedly lead to sharp economic changes within the markets.

The increased pace of interest rate cuts by the US Federal Reserve is likely to play a role in bolstering gold, along with the continued rise in geopolitical risks stemming from the protracted Russia-Ukraine conflict and ongoing tensions in the Middle East.

Meanwhile, gold prices are set to end the year with a stunning 27% gain, recording its best annual performance since 2010.

Gold prices rose to their highest levels ever at $3800 per ounce on October 31, as gold prices closed last year at $2062, due to geopolitical risks, acquisitions by central banks, and the interest rate cut cycle by the US Federal Reserve.

Gold has hit record highs of around 40 times this year, peaking in October, achieving an increase of about 35% this year through recorded $2800 on October 31, scoring its best performance since 1979.

Gold is under pressure from expectations of a Fed rate cut in 2025, but safe-haven gold remains supported by heightened geopolitical risks stemming from the protracted Russia-Ukraine conflict and ongoing tensions in the Middle East, which provide continued support to safe-haven assets including gold.

Investors react to signs of Fed hawkishness, strong labor market data— reflected in payrolls numbers— and persistent inflation, have prompted FOMC members to expect a Fed rate cut in 2025, which expectation has led to a slight decline in non-yielding gold prices during the fourth quarter.

However, safe-haven gold may gain some support as markets anticipate signals on the US economy under the incoming Trump administration and the Fed’s interest rate outlook for 2025, and demand for the yellow metal may increase as potential tariffs and trade policies by the incoming Trump administration could lead to trade conflicts.

The Federal Reserve signaled a more cautious outlook for additional interest rate cuts in 2025, signaling a shift in monetary policy stance, a development that highlights the uncertainty surrounding future policy adjustments amid the expected economic strategies of the incoming Trump administration.

Markets are awaiting the release of the weekly U.S. jobless claims on Thursday and the Manufacturing Purchasing Managers' Index (PMI) report on Friday.