Iran-Israel Truce Calms Gold Markets Amid Investor Focus on Powell’s Testimony and US Inflation Data

Gold prices in the local market held steady during Wednesday’s trading session, coinciding with a slight uptick in global spot prices, supported by a weaker US dollar, falling Treasury yields, and a notable rebound in global equity markets. This market movement comes in the wake of the recently declared ceasefire between Iran and Israel, which has helped ease geopolitical tensions that had fueled significant market volatility in recent days.

In the Egyptian market, the price of 21-karat gold stabilized at EGP 4,700 per gram, while global gold prices rose by about $5 to settle at $3,322 per ounce.

Meanwhile, 24-karat gold recorded EGP 5,371 per gram, 18-karat at EGP 4,029, and 14-karat at EGP 3,134. The price of a gold pound coin stood at EGP 37,600.

This comes after gold prices had dropped by EGP 120 during Tuesday’s session. The 21-karat gram had opened at EGP 4,820 and closed at EGP 4,700. Globally, the ounce fell by $52, opening at $3,369 and closing at $3,317.

The market is now witnessing a relative calm after days of heightened fluctuations, with the ceasefire agreement directly contributing to lower demand for safe-haven assets like gold. Investors have shifted focus toward equities, driven by growing confidence in geopolitical stability.

At the same time, investor attention is turning to key upcoming US economic indicators. Expectations are mounting that the Federal Reserve may begin cutting interest rates by September, bolstered by the latest drop in US consumer confidence, which declined to 93.0 in June, down from 98.4 in May. This suggests rising consumer caution regarding future spending and economic growth.

Fed Chair Jerome Powell continues his two-day testimony before Congress, during which he reiterated on Tuesday that the central bank is “not in a hurry to cut rates”, despite mixed inflation data in recent months.

Powell noted that new tariffs could introduce inflationary pressures that may become evident in data for June or July. He added:

“If inflationary pressures remain contained, we may move to lower rates sooner rather than later — but I don’t want to point to any specific meeting.”

He also emphasized that any significant weakening in the US labor market would weigh heavily on the Fed’s policy decisions, though he affirmed that “the economy remains strong, and the labor market is resilient,” indicating no urgency to act hastily.

On Friday, the markets await the release of the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge. A softer-than-expected reading could reinforce market bets on a near-term rate cut — a move that would likely provide fresh upward momentum for gold.

Currently, gold appears to be in a transitional phase of temporary balance, caught between a momentary geopolitical calm in the Middle East and lingering uncertainty surrounding US monetary policy. Nevertheless, gold remains poised for a potential rebound in the short term, especially if inflation data disappoint and Powell signals a more dovish stance.