Gold Pulls Back as Markets Await Fed Decision Today

Local and international gold markets saw a decline in trading today, Wednesday, amid anticipation of the U.S. Federal Reserve's decision on the future of interest rates, according to a report from the "iSagha" online platform for gold and jewelry trading.

Saeed Embaby, the executive director of the "iSagha" platform, stated that local gold prices have dropped by about 20 EGP in today's trading compared to yesterday's close, with a gram of 21-carat gold recording 4,930 EGP. Globally, an ounce of gold fell by about $22 to reach $3,668.

Embaby added that a gram of 24-carat gold recorded 5,634 EGP, 18-carat was at 4,226 EGP, and 14-carat reached 3,287 EGP, while the gold pound stabilized at 39,440 EGP.

Yesterday's Rise, Today's Retreat

The report noted that gold prices had risen yesterday, Tuesday, by about 45 EGP. A gram of 21-carat gold opened trading at 4,945 EGP, touched 4,970 EGP, and closed the day at 4,950 EGP. The global ounce rose by about $38, starting at $3,681, reaching $3,700, and closing at $3,690. However, gold retreated today, pressured by a stronger dollar, moving away from its historic high of $3,700 per ounce.

Awaiting the Fed's Decision

It is widely expected that the U.S. Federal Reserve will cut interest rates by 25 basis points to a range of 4.0% to 4.25%. However, there are concerns that the bank's tone might contradict market expectations, which could halt the risk-appetite wave and strengthen the dollar's recovery.

Weak U.S. employment data has reinforced market bets on rate cuts in the upcoming meetings. Futures markets are pricing in a quarter-point reduction at every remaining meeting this year, with potential for further cuts in early 2026. However, many believe that these expectations may not be confirmed by Fed Chairman Jerome Powell.

The dollar has also seen a slight rebound from its lowest level since July due to repositioning ahead of the Federal Open Market Committee meeting, putting additional pressure on gold after a three-day rally that led it to historic highs.

Gold and Monetary Policies

Embaby pointed out that gold is historically linked to interest rate cuts. Every monetary easing cycle opens a new chapter in its upward story. In 2008, with the first cut after the financial crisis, the precious metal rose by more than 110%. In 2019, it jumped by about 35% after three consecutive cuts. Today, in September 2025, investors are awaiting a new 25-basis-point cut, which raises the question: Are we witnessing a new rally?

He explained that lower returns diminish the dollar's appeal, pushing investors toward gold as a safe alternative. Low interest rates also pressure the U.S. currency, which strengthens dollar-denominated gold. He also emphasized that gold remains a safe haven during geopolitical and economic crises, noting that this time the yellow metal is not starting from low levels as it did in the past, but is already standing at $3,650 per ounce.

Broader Economic Dimensions

While any new surge may not replicate the percentages of past years, it could open the door to unprecedented record levels. This comes amid growing fears of stagflation, where inflation meets slowing growth, which boosts demand for gold as a hedge.

This trend is supported by what Bank of America recently revealed: gold has not declined since 2001 during any period when U.S. inflation exceeded 2% in parallel with expansionary monetary policies. The August Consumer Price Index data, which recorded 2.9%, further reinforces this trend.

Noteworthy Gold Performance

From its 52-week low of $2,564 in September 2024, gold has risen by 44%, while since the beginning of 2025 it has risen by 40% from its lowest point of $2,638. Data shows that the metal recorded monthly gains of 6.20% and has risen by more than 40% year-to-date, confirming its status as the top-performing metal in commodity markets this year.

Future Outlook

While investors await Jerome Powell's statements after the Fed meeting, gold remains caught between the pressure from the dollar and the ambiguity of monetary policies on one hand, and the support from the expected weakening of the U.S. currency and geopolitical risks on the other.

Despite the fluctuations, the yellow metal remains supported by institutional and sovereign demand, as well as major economic factors that are renewing its traditional role as a safe haven and store of value.