Domestic gold prices declined during Saturday's trading, coinciding with the weekly close of the global stock exchange, following a 3.7% drop in the global ounce over the week. This decline was driven by a rising US dollar, higher Treasury yields, and accelerating inflation rates in the United States. According to a report by the "Marsad Al Dahab" for Economic Studies, these factors have reinforced expectations that restrictive monetary policy will persist for a longer period.
The Research Expert in Gold and Jewelry Affairs and Director of the "Marsad Al Dahab" stated that gold prices dropped by about 20 pounds compared to yesterday's close. Consequently, 21-karat gold recorded around 6,850 pounds per gram, while the global ounce lost about $175 over the week to close at $4,541, according to World Gold Council data.
He added that 24-karat gold recorded around 7,829 pounds per gram, while 18-karat gold reached approximately 5,871 pounds per gram. Meanwhile, the gold coin (Genieh) stabilized at 54,800 pounds.
The report noted that the domestic market had already recorded a decline of about 75 pounds during Friday's trading, where 21-karat gold opened at 6,945 pounds and closed at 6,870 pounds. Meanwhile, the global ounce fell by about $110, opening at $4,651 and closing at $4,541.
The primary pressures on gold resulted from rising US Treasury yields and a strong dollar, alongside escalating inflation pressures in the United States. This reduced the likelihood of US interest rate cuts during the current year and weakened the appeal of gold compared to yield-bearing assets.
In contrast, oil prices rose by more than 2% amid escalating concerns over supply disruptions through the Strait of Hormuz. Brent crude jumped by about 7.8% over the week to trade above $109 per barrel, which heightened global inflation fears and renewed pressure on financial markets.
Geopolitical tensions in the Middle East also fueled anxiety within the markets, particularly after exchanging statements between the United States and Iran regarding the Strait of Hormuz and the Iranian nuclear program. This contributed to the continuous rise in energy prices and a decline in investor appetite for high-risk assets.
The report explained that markets are now pricing in the likelihood of high US interest rates remaining for a longer period, especially with real yields on 30-year US bonds rising above 5%, which increases the opportunity cost of holding non-yielding gold.
Several monetary policymakers at the Federal Reserve emphasized this week that reining in inflation remains a priority, with some keeping the door open for potential further interest rate hikes if price pressures persist.
Despite current pressures, analysts believe that gold still retains its appeal as a long-term hedge in light of ongoing global economic uncertainty, escalating geopolitical risks, and high inflation rates. However, the short-term trend remains contingent upon the movements of the US dollar and US bond yields.
In a related context, the World Gold Council report showed continued strength in investment demand in China. Gold-backed ETFs recorded robust inflows during April, raising assets under management to 306 billion yuan, while the People's Bank of China continued to increase its gold reserves for the 18th consecutive month.
On the other hand, wholesale gold demand within China declined by 23% during April, with a slowdown in jewelry demand as the market entered its traditional slack season, despite the sustained strength in investment demand for gold bars and coins.
On the domestic front, data from the Financial Regulatory Authority revealed that precious metals investment funds, led by gold and silver, topped the list of highest-yielding investment instruments during the first quarter of 2026, recording a return of 20.37%. This indicator reflects the growing investor interest in safe havens amid global market turmoil.
The report concluded that gold funds have contributed significantly to expanding the base of investors in the precious metal within the Egyptian market by allowing investment with small amounts without the need to physically buy gold, which has boosted demand for these instruments recently, coinciding with rising inflation rates and global market volatility.
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