Gold Retreats as US Bond Yields Rise and Trade Optimism Grows Between Washington and Beijing

Gold prices in the local market declined today, Saturday, coinciding with the global stock exchange's weekly holiday, following a busy week in which the ounce gained about 6%, driven by escalating trade tensions between the US and China, and continued global political and economic uncertainty, according to a report issued by the "iSagha" platform, specialized in gold and jewelry trading.

Said Imbabi, the platform's Executive Director, stated that gold prices dropped by about 10 Egyptian pounds compared to the close of Friday's trading, with the price of 21-carat gold recording 5730 pounds. Meanwhile, the ounce closed the week at $4254 after touching the $4380 level, having risen by $237 during the week.

The 24-carat gold recorded 6549 pounds, 18-carat 4911 pounds, and 14-carat 3820 pounds, while the price of the gold pound stabilized at 45,840 pounds.

The yellow metal had lost about 80 pounds during Friday's trading alone, as the 21-carat opened at 5820 pounds and closed at 5740 pounds.

Imbabi pointed out that despite the slight decline, gold remains on an upward trajectory since the beginning of the year, having risen by more than 62%, recording its best weekly performance since the Lehman Brothers crisis in 2008.

As for silver, it declined by about 5% from its historical highs, but is still trading above the $50 per ounce barrier.

He explained that gold, in turn, temporarily fell by about $200 below the $4200 level before rebounding above $4250, driven by the atmosphere of de-escalation between China and the United States.

Globally, gold fell by 2% from its historical high of $4379 per ounce on Friday, following statements by US President Donald Trump confirming that the "triple-digit tariffs imposed on China are unsustainable," which boosted optimism for a trade dispute truce.

In contrast, the US Dollar and US Treasury bond yields rose, with the yield on 10-year bonds climbing by about three basis points to 4.01%. Real yields also stabilized at 1.72%, which increased pressure on the precious metal.

The report confirmed that improved risk appetite in global markets after Trump's statements contributed to the decreased demand for gold as a safe haven. Trump is expected to meet with his Chinese counterpart, Xi Jinping, within two weeks in South Korea to discuss the future of the trade agreement.

Regarding monetary policy, a number of Federal Reserve officials, including Alberto Musalem, Christopher Waller, and Neel Kashkari, announced their support for an interest rate cut at the October meeting, while committing to the 2% inflation target. Investors expect two additional 25-basis-point cuts in October and December.

For the coming week, markets are awaiting the release of the US Consumer Price Index (CPI) on Friday, amidst expectations that it will provide new signals regarding the inflation path and the Fed's upcoming decisions.

According to investment bank estimates, HSBC raised its forecast for the average gold price in 2025 to $3455 per ounce, with a projection of reaching $5000 in the first half of 2026, while Standard Chartered predicts an average price of $4488 next year.

Gold temporarily declines under pressure from rising yields and the dollar, but the overall trend remains upward, supported by geopolitical tensions and increasing institutional and central bank purchases.