Marsad Al Dahab reported a slight decline in local gold prices during Saturday's mid-day trading, coinciding with the weekly closure of international markets, after gold ended the week with its first weekly gain in five weeks. Spot gold rose by 2.2% over the week, supported by weaker-than-expected U.S. labor market data and declining expectations for further monetary tightening by the Federal Reserve. At the same time, optimistic forecasts from major global financial institutions and continued central bank purchases reinforced the positive outlook for gold during the second half of the year.
Marsad Al Dahab for Economic Studies said that the price of 21-karat gold declined by approximately EGP 10 during Saturday's mid-day trading to around EGP 5,900 per gram, compared with Friday's closing level. Meanwhile, the international gold price rose by $88 over the week to approximately $4,176 per ounce, its highest level since June 23.
It added that 24-karat gold traded at around EGP 6,743 per gram, while 18-karat gold reached approximately EGP 5,057 per gram. The price of the Egyptian gold sovereign stood at around EGP 47,200.
Marsad Al Dahab explained that gold ended Friday's session with strong gains, as the price of 21-karat gold increased by around EGP 100, rising from EGP 5,810 to EGP 5,910 per gram. At the same time, spot gold climbed from $4,122 to $4,176 per ounce, recording a weekly gain of approximately 2.3%, its first positive weekly performance in five weeks.
The rally followed the release of U.S. employment data showing that the economy added only 57,000 jobs in June, well below market expectations of 110,000, while May's figure was revised downward to 129,000. The weaker labor data prompted investors to scale back expectations for further interest rate hikes, leading to a decline in the U.S. dollar and Treasury yields, creating a more supportive environment for gold, which is a non-yielding asset.
Despite ongoing geopolitical tensions in the Middle East, markets focused primarily on economic fundamentals—particularly the outlook for U.S. monetary policy—while geopolitical risks continued to provide underlying support for gold prices without serving as the primary market driver.
Global Banks: The Bullish Trend Remains Intact
HSBC believes gold remains well positioned for additional gains through the end of 2026, despite persistent pressure from elevated U.S. Treasury yields and a stronger U.S. dollar. The bank said that growing demand for portfolio diversification, continued central bank purchases, and steady inflows into physically backed gold exchange-traded funds (ETFs) will remain the key drivers supporting prices in the months ahead.
The bank noted that U.S. Treasury yields have become the dominant factor influencing gold prices this year, but maintained its recommendation to overweight gold in investment portfolios, emphasizing that the precious metal continues to serve as one of the most effective tools for diversification and risk management.
HSBC's Chief Precious Metals Analyst, James Steel, also stated that the correction following gold's record high in January was primarily driven by liquidity-related selling amid higher Treasury yields and a stronger U.S. dollar, rather than a loss of gold's safe-haven appeal. He highlighted continued institutional demand, particularly in China, where the People's Bank of China has maintained its gold purchases and financial institutions and insurance companies have expanded their investments in the precious metal.
Meanwhile, J.P. Morgan expects gold's upward trend to continue, projecting prices could reach around $4,300 per ounce during the third quarter and $4,500 during the fourth quarter of 2026. However, the bank cautioned that stronger-than-expected U.S. economic data could temporarily pressure gold prices by reviving expectations of tighter monetary policy.
Even so, the bank maintained its constructive long-term outlook, supported by continued central bank buying and robust physical demand, expecting these factors to remain key pillars of the gold market through 2027.
World Gold Council: Central Banks Added a Net 41 Tonnes in May
The latest data from the World Gold Council (WGC) further reinforces this optimistic outlook. According to the Council, central banks increased their official gold reserves by a net 41 tonnes during May 2026, highlighting that official-sector demand remains resilient despite heightened market volatility.
Poland led global purchases by adding 18 tonnes, bringing its year-to-date acquisitions to 64 tonnes. China followed with 10 tonnes, marking its 20th consecutive month of gold purchases and lifting its total reserves to approximately 2,331 tonnes. Uzbekistan and Kazakhstan also continued expanding their reserves, while Singapore resumed gold buying for the first time since September 2025.
On the other hand, Russia and Türkiye reported modest net sales during May. Nevertheless, the broader trend remained supportive for gold, as the latest World Gold Council Central Bank Gold Reserves Survey showed that 89% of participating central banks expect global official gold reserves to continue increasing over the next 12 months, while 45% plan to expand their own gold holdings—the highest percentage since the survey was first launched.
Marsad Al Dahab's View
Marsad Al Dahab believes that gold's strong performance over the past week reflects the market's renewed focus on economic fundamentals, particularly the outlook for U.S. monetary policy, as the influence of geopolitical developments has gradually moderated.
The Observatory also believes that the optimistic outlook from leading global investment banks, combined with sustained central bank purchases, indicates that the correction witnessed over recent months has not altered gold's long-term bullish trend. Instead, it represents a healthy market repricing following the historic rally recorded at the beginning of 2026. Central bank demand and investment inflows are therefore expected to remain the most influential factors shaping the trajectory of gold prices in the period ahead.
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