Gold Rises, Backed by Dollar Weakness and Political Tensions in Washington

Gold prices rose in both local and global markets on Tuesday, supported by a weaker U.S. dollar and escalating political tensions in the United States following President Donald Trump’s surprise decision to dismiss Lisa Cook, a member of the Federal Open Market Committee (FOMC). The move reignited debate over the independence of the Federal Reserve.

Saeed Embabi, a gold market expert, said that local gold prices increased by about EGP 15 during today’s session, with 21-carat gold reaching EGP 4,590 per gram, while the ounce rose by $10 to trade at $3,375.

He added that 24-carat gold recorded EGP 5,246, 18-carat stood at EGP 3,934, and 14-carat reached EGP 3,060, while the gold pound coin settled at EGP 36,720.

On Monday, the market had seen a decline of about EGP 10, with 21-carat gold opening at EGP 4,585 and closing at EGP 4,575, while the ounce fell by $6, from $3,371 to $3,365.

Trump’s decision to dismiss Cook—citing alleged mortgage lending irregularities—was considered an unprecedented move that raised concerns about the Fed’s independence. Observers noted that the move could be an attempt to secure a majority aligned with Trump’s views within the central bank, especially after the appointment of Stephen Miran and the resignation of Adriana Kugler, which shifted the board’s balance and heightened investor uncertainty.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, reported a 0.18% increase in its holdings to 958.49 tonnes on Monday.

Recent remarks by Fed Chair Jerome Powell reinforced expectations of a September interest rate cut by 25 basis points, providing further support for gold.

At the same time, China’s net gold imports through Hong Kong surged by 126.81% in July compared to June, according to data from the Hong Kong Census and Statistics Department released Tuesday.

Markets are also awaiting key economic data this week, including consumer confidence, jobless claims, GDP figures, and Friday’s release of the Fed’s preferred inflation gauge, the core PCE index.

U.S. durable goods orders dropped by 2.8% in July, though the data had little immediate impact on the dollar.

If the Federal Reserve continues to ease monetary policy while political turmoil undermines confidence in U.S. policymaking, the dollar will likely remain under pressure—conditions that typically favor gold.

Commenting on the developments, Embabi said: “The sudden decisions coming from the U.S. administration—such as the direct presidential dismissal of a key Fed member—highlight the growing overlap between politics and economics in the world’s largest economy. These practices not only damage the credibility of the U.S. economy but also deepen uncertainty in global markets, pushing investors toward gold as the safest haven.”

He added:“We are facing an unprecedented scenario: political tensions in Washington and a weakening dollar are combining to support gold. But this support is fragile and temporary. Sustained higher gold prices require strong economic fundamentals such as rate cuts and continued strategic demand from central banks, not just reactive political decisions.”

He concluded:“Local investors should approach these developments with caution, as the market is poised for significant volatility. Without clearer and more stable Fed policies, further turbulence could directly impact gold prices in Egypt.”