Gold Rises 1% Globally and Locally on Fed Rate Cut Expectations

Gold prices climbed around 1% in both global and local markets last week, supported by growing expectations that the U.S. Federal Reserve will cut interest rates at its upcoming September meeting, according to a report by the iSagha platform.

Local Market Moves

Saeed Embabi, CEO of iSagha for online gold and jewelry trading, said Egyptian gold prices gained about EGP 45 per gram during the week. The benchmark 21-karat opened at EGP 4,540 and closed at EGP 4,585.

24-karat: EGP 5,240

18-karat: EGP 3,930

14-karat: EGP 3,054

Gold pound coin: EGP 36,680

Global Market: From Volatility to a Sharp Rally

On international exchanges, gold opened the week at $3,336/oz, dipped midweek to $3,317 under pressure from a stronger dollar and rising yields, then recovered to $3,344 before slipping to $3,338 on Thursday. The decisive move came Friday after Fed Chair Jerome Powell’s speech at Jackson Hole, which sent bullion sharply higher to close at $3,371/oz.

Powell noted that “keeping monetary policy in a restrictive range and shifts in the balance of risks may require adjusting our stance,” a comment investors interpreted as a clear signal of an imminent rate cut in September.

Fed Bets and Gold Impact

The CME FedWatch Tool now shows markets pricing in a 91% probability of a 25-basis-point cut in September, with chances of two more reductions before year-end. However, Powell left the door open for only one move if inflation pressures persist.

While this outlook provides clear support for gold, analysts warn that stronger-than-expected U.S. inflation or jobs data could limit the upside.

Physical Demand in Asia

Despite the price rally, physical demand in Asia softened. Reuters reported retail demand in India and China fell to about 60% of normal levels, as buyers adopted a wait-and-see approach amid volatile prices. Seasonal demand, particularly during Diwali, could revive purchases if prices stabilize.

Conclusion

Gold ended the week modestly higher, boosted by Powell’s remarks and dovish Fed expectations. However, the metal’s near-term trajectory remains tied to upcoming U.S. inflation data. In Asia, demand for jewelry remains cautious, while in Egypt, gold retained steady gains amid a stable exchange rate and subdued consumer appetite.