Gold Takes Hold Amid Uncertainty over US Interest Rates

Gold prices rose slightly in local markets during Wednesday's trading, amid gold’s consolidation on the global stock market following the statements of the US Federal Reserve members on the fate of interest rates and market anticipation of the minutes of the US Federal Reserve’s meeting later today.

Said Imbabi, Executive Director of the “i-Sagha”, said that gold prices rose in local markets by EGP 10 during the transactions compared to the end of yesterday’s trading, in which the gram of 21-karat gold recorded EGP 3175 and an ounce on the global stock exchange declined by $21 to record $2414.

He added that the 24-karat gold reached EGP 3629, 18-karat registered EGP 2721, 14-karat gold sold at EGP 2117, and the gold pound hit EGP 25400.

On the other hand, gold prices declined slightly during yesterday's trading amid a state of fluctuation in the local markets.

The 21-karat opened trading at EGP 3175, touched EGP 3170, and closed at EGP 3165. Meanwhile, the ounce rose on the global stock market by $11, with transactions beginning at $2432, and concluding at $2421.

In a related context, the markets are awaiting the minutes of the US Federal Reserve’s latest policy meeting on Wednesday and Austan Dean Goolsbee's remarks.

Federal Reserve policymakers warned that the US central bank needs more convincing that inflation is falling before it can start cutting interest rates.

It stressed that the US Federal Reserve is likely to hold interest rates at their current levels for a longer period, which in turn may strengthen the US dollar and weaken gold.

Imbabi explained that gold in global markets is holding up and receiving support, through renewed trade tensions between the United States and China, geopolitical tensions in the Middle East, and strong demand from central banks and Asian buyers.

Fed Governor Christopher Waller said that he does not believe that further interest rate hikes will be necessary.

Waller added that he will need some data before making the decision to cut rates.

Atlanta Fed President Raphael Bostic noted that the US central bank should be cautious about this first-order move, adding it "would rather wait for a longer period before implementing a rate cut to ensure that inflation does not start to rebound."

Cleveland Fed President Loretta Mester said keeping interest rates tight is not a concern at the moment given the strength of the labor market.

Financial markets expect the first cut will happen in September at the earliest, with two reductions of a quarter percentage point before the end of the year.

On Tuesday, the US announced new tariffs on a range of Chinese goods, at a time when China may consider increasing temporary tariff rates on imported cars.