Gold trading at a discount of up to EGP 312 in the local market, says Embabi

Gold prices declined in the local market during Tuesday’s trading despite a rise in the global ounce price, amid weak domestic demand and reduced liquidity in the market, according to a report released by the iSagha platform.

Saeed Embabi, Executive Director of the platform, said that local gold prices fell by about EGP 65 during today’s trading, bringing the price of 21-karat gold to around EGP 7,425 per gram.

He added that 24-karat gold recorded about EGP 8,486 per gram, while 18-karat gold reached EGP 6,364 per gram, and the gold sovereign stood at approximately EGP 59,400.

Globally, the gold ounce rose by about $41 to reach around $5,179, amid sharp volatility in international markets.

Embabi explained that gold prices in the local market are currently trading at a discount of up to EGP 312 per gram compared with the global price, due to a sharp decline in demand, rising resale activity, and reduced liquidity within the domestic market.

He noted that the temporary halt in gold exports has also contributed to additional pressure on local prices, as the move aims to provide liquidity for the domestic market. This comes alongside restrictions on air traffic in several Gulf countries, which represent the largest destination for Egyptian gold exports, particularly the United Arab Emirates.

Embabi also expected manufacturing costs (making charges) for gold to increase in the coming period, as the Egyptian government moves to raise energy prices, which will increase production input costs in the gold and jewelry manufacturing sector.

The Egyptian government has already raised the prices of several petroleum products and vehicle fueling gas by EGP 3, effective Tuesday, citing exceptional conditions in global energy markets caused by geopolitical developments in the Middle East.

The government stated that these developments have significantly increased the cost of imports and domestic production. In addition, supply chain disruptions, higher risk levels, and rising maritime shipping and insurance costs have led to a sharp surge in global crude oil and petroleum product prices.

The report noted that the decline in local gold prices came despite the rise in global prices. However, the increase in the local exchange rate of the U.S. dollar—approaching EGP 53—helped limit the scale of losses.

The Egyptian pound continues to weaken against the U.S. dollar and may reach new record levels in banks, driven by continued outflows of short-term foreign investments from emerging markets and escalating geopolitical tensions in the region.

At the same time, the local economy faces dual pressures from foreign currency shortages and rising global oil prices, which place additional challenges on Egypt’s economic reform program.

Globally, gold maintained modest gains during Tuesday’s trading session but remained below the $5,200 level, as concerns about inflation eased after oil prices declined following remarks by U.S. President Donald Trump, who said the Middle East war could “end soon.”

Gold also received support from a weaker U.S. dollar and declining U.S. Treasury yields, which reduced the opportunity cost of holding the non-yielding metal.

Meanwhile, the recovery in global equity markets limited gold’s gains as investors shifted toward riskier assets.

Oil prices fell by more than 7% after Trump’s comments, easing concerns about prolonged disruptions to global oil supplies.

However, geopolitical tensions remain high. The Iranian Revolutionary Guard stated that Tehran—not Washington—will determine the fate of the war, warning that Iran could prevent oil exports from the region if U.S. and Israeli attacks continue.

The conflict has effectively led to the closure of the Strait of Hormuz, through which roughly one-fifth of global oil supplies pass, disrupting oil tankers for more than a week and forcing some producers to halt production as storage facilities filled up, pushing energy prices sharply higher.

At the same time, the U.S. dollar fell by about 0.6% to its lowest level in a week, making gold cheaper for holders of other currencies, while yields on 10-year U.S. Treasury bonds declined, further supporting bullion.

Markets are now awaiting the U.S. Federal Reserve’s interest rate decision at its meeting ending March 18, with expectations that rates will remain unchanged and that the first rate cut of the year could occur in July, according to CME’s FedWatch tool.

Investors are also closely watching the release of the U.S. Consumer Price Index (CPI) for February on Wednesday, followed by the Personal Consumption Expenditures (PCE) index on Friday, the Federal Reserve’s preferred measure of inflation.

These key data releases are expected to play a crucial role in shaping expectations for U.S. monetary policy, which will in turn influence the dollar and global demand for gold, while markets continue to monitor developments in the Middle East conflict and its impact on global markets.