Gold prices in the local market recorded a notable increase during trading on Saturday, coinciding with the weekly closure of global exchanges, after the ounce posted strong weekly gains of approximately 1.9%. This rise was driven by escalating geopolitical tensions and political instability, which pushed the yellow metal to new record levels during the week, amid renewed volatility in precious metals markets, according to a report by Ai Sagha.
Saeed Embaby, CEO of the platform, stated that local gold prices rose by about EGP 10, bringing the 21-karat gold price to EGP 6,160 per gram.
Globally, the ounce gained around US$86 over the week, after briefly reaching a historical high of US$4,643, before ending at US$4,596.
Embaby noted that 24-karat gold traded at approximately EGP 7,040 per gram, 18-karat gold at EGP 5,280 per gram, and the gold pound reached nearly EGP 49,280.
Despite these gains, gold retreated from its highest levels on Friday, affected by profit-taking, following U.S. economic data showing that the labor market was stronger than expected over the past two weeks. This led traders to question whether the Federal Reserve would cut interest rates twice, a sentiment reflected clearly in swap markets.
Gold declined amid improving U.S. economic data and easing geopolitical risks, prompting investors to reduce bets on broad monetary easing by the Federal Reserve.
Market sentiment also turned cautious after U.S. President Donald Trump raised concerns over the Federal Reserve leadership, expressing hesitation about nominating Kevin Hassett, Director of the National Economic Council, to the Fed chair position, telling him during a White House event: “I actually want you to stay as you are, if you want to know the truth.”
In this context, the Poly Market platform reported that Kevin Warsh became the frontrunner to lead the Federal Reserve, with his chances rising from around 40% to 60%.
Geopolitically, risk premiums continued to decline following reports that Israeli Prime Minister Benjamin Netanyahu requested Trump to postpone any potential attack on Iran. According to Axios, Netanyahu repeated this request in a second call, seeking more time to prepare for any possible Iranian response. Meanwhile, U.S. officials did not rule out military action if Tehran resumed suppressing protesters.
On the economic front, data from the Federal Reserve showed that U.S. industrial production rose by 0.4% in December, exceeding expectations of a 0.1% decline. Federal Reserve officials also held phone discussions, led by Governor Michelle Bowman and Boston Fed President Susan Collins, ahead of the blackout period for policymakers starting Saturday.
Upcoming U.S. Economic Data
Investors are awaiting a package of U.S. economic data next week, including housing figures, initial jobless claims, the final Q3 2025 GDP reading, and the Fed’s preferred inflation measures, particularly the core Personal Consumption Expenditures (PCE) index, alongside preliminary PMI indicators and the consumer confidence index.
Recent data painted a mixed picture for inflation: consumer prices stabilized while producer prices continued to rise. Year-on-year, the headline CPI remained at 2.7% in December, unchanged from November, while the Producer Price Index (PPI) accelerated to 3% from 2.8%, reflecting continued cost pressures in production.
The U.S. labor market remained resilient, with the nonfarm payroll report showing strength despite missing forecasts, while the unemployment rate declined slightly to 4.4%, below the Fed’s estimate of 4.5%. Initial jobless claims also fell from 207,000 to 198,000.
In this context, Michelle Bowman emphasized that the Fed should not halt monetary easing, citing the need for another rate cut given labor market risks. Susan Collins highlighted the central bank’s independence, stating that “the Federal Reserve, with its responsibility, has the independence to make difficult decisions that may not be popular in the short term.”
Despite these statements, traders reduced expectations for further easing, with trading platforms indicating an expected total rate cut of only 43 basis points by the end of 2026.
India: Gold Continues to Rise on Investment Demand
In Asia, gold prices in India rose last month, tracking strong gains in global markets, driven by unprecedented inflows into gold ETFs, as 2025 demand reached historic levels, according to Kavita Chacko, Head of Research for India at the World Gold Council.
Chacko noted that global gold prices continued to climb in 2026, reaching record highs, with a 6% increase in the first 13 days of the year, surpassing US$4,600/oz, following a 4.2% rise in December and a 67% gain during 2025, the highest since 1979.
Local prices in India rose in tandem, reaching INR 139,799 per 10 grams, supported by geopolitical uncertainty, persistent policy ambiguity, strong safe-haven demand, and continued positive flows into global gold ETFs.
Chacko added that domestic gold demand remains resilient but measured, as high prices have curtailed jewellery purchases and average ticket sizes, with consumers favoring lightweight jewellery with lower making charges.
Indian gold ETFs recorded net inflows of US$1.29 billion in December, marking the eighth consecutive month of inflows, with cumulative holdings rising to 95 tonnes, a historic high, supported by weak equity markets and sustained gold price momentum.
Chacko concluded that seasonal festival and wedding demand may provide additional support for the jewellery market, though investment demand will remain the primary driver of gold in India.
China: Record Performance and Continued Investment Demand
Gold continued its strong performance in China during December, ending 2025 with the best annual performance in decades, both according to the Shanghai benchmark and the LBMA price.
Although wholesale demand rebounded seasonally in December, total demand for 2025 declined for the third consecutive year, as weak jewellery consumption outweighed strong investment demand.
Chinese gold ETFs posted their best year ever, with AUM surging 243% to RMB 242 billion and holdings rising to 248 tonnes, alongside record-high trading volumes of gold futures.
Meanwhile, the People’s Bank of China continued to strengthen its gold reserves throughout 2025, adding 27 tonnes, bringing official holdings to 2,306 tonnes, approximately 8.5% of total foreign exchange reserves, signaling the growing role of gold as a strategic reserve asset.
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