Gold Trims Losses Locally ,Globally Amid Escalating Economic Uncertainty

Gold prices trimmed their losses in the local market during trading on Thursday, supported by rising global ounce prices, amid escalating economic uncertainty gripping international markets.

The price of gold in the local market rose to EGP 4,610 per gram, after falling this morning to EGP 4,585, affected by a previous drop in global prices. In global markets, the ounce managed to recover a significant portion of its losses, rising to $3,300 after previously falling to $3,245, amid ongoing economic turmoil that is pushing investors toward gold as a safe haven.

The price of 24-karat gold reached EGP 5,269 per gram, while the price of 18-karat gold reached EGP 3,951 per gram. The price of 14-karat gold reached approximately EGP 3,074 per gram, and the price of the gold pound reached approximately EGP 36,880 per gram. Gold prices in local markets fell by EGP 5 during trading on Wednesday. The price of a gram of 21-karat gold opened at EGP 4,620 and closed at EGP 4,615. Meanwhile, an ounce fell by $27, opening at $3,305 and closing at $3,287.

Gold prices witnessed a significant recovery during trading on Thursday, after paring most of their previous losses, supported by the decline of the US dollar and growing uncertainty about the future of the global economy amid escalating tensions related to US tariff policies.

This recovery was attributed to a federal court ruling in New York halting the implementation of US President Donald Trump's tariff policy, believing that the decision contributed to undermining the strength of the dollar, thus supporting demand for gold as a safe haven. The court ruled that the Trump administration exceeded its constitutional powers under the International Emergency Economic Powers Act (IEEPA) when imposing tariffs on several trading partners and ordered the tariffs to be rescinded within ten days, prompting the White House to file an urgent appeal.

These developments come at a time of growing concern within economic circles about the impact of tariffs on global growth, amid warnings of an impending recession. Analysts at Invesco warned that the confusion caused by trade policy uncertainty could push US companies to freeze investment plans and postpone hiring decisions and wage increases, which could negatively impact corporate profits and domestic consumption.

Meanwhile, the minutes of the US Federal Reserve's May 6-7 meeting revealed that bank officials face increasing challenges, most notably persistent inflationary pressures and a declining labor market, forcing policymakers to make difficult decisions in the coming period. The minutes indicated that inflation may persist longer than expected, coinciding with declining growth and employment prospects, amid the impact of new tariff policies.

Although the Federal Reserve decided at its last meeting to hold interest rates within a range of 4.25% to 4.5%, Chairman Jerome Powell stressed the need to be cautious in taking further steps until the full economic impact of recent government policies becomes clear.

Investors are awaiting tomorrow's release of the Personal Consumption Expenditures (PCE) price index for April, the Fed's preferred measure of inflation. Expectations indicate a moderate annual growth rate of 2.5%, compared to 2.6% in March, but the impact of the data may be limited amid escalating economic and political tensions.

In this volatile context, gold remains the biggest gainer so far, driven by its status as a safe-haven asset and the continued uncertainty in global markets.