Local Gold Prices Fall by EGP 50 in Midday Tuesday Trading

Gold prices declined in local markets and on the global bullion exchange during mid-day trading on Tuesday, pressured by a stronger U.S. dollar, rising U.S. Treasury yields, and growing concerns over persistent inflation in the United States, alongside shifting expectations for Federal Reserve monetary policy, amid continued uncertainty surrounding geopolitical developments in the Middle East, according to a report issued by the Marsad Al Dahab for Economic Studies.

The report stated that local gold prices fell by around EGP 50 compared to Monday’s close, with 21-karat gold dropping to EGP 6,820 per gram, while the global ounce price declined by nearly $54 to $4,507, according to data from the World Gold Council.

Meanwhile, 24-karat gold recorded EGP 7,829 per gram, 18-karat gold stood at EGP 5,871 per gram, and the gold pound coin traded at around EGP 54,800.

The report noted that gold prices had risen during Monday’s session, with 21-karat gold opening at EGP 6,845 and closing at EGP 6,870, while the global ounce climbed from $4,541 to $4,561 before retreating again during Tuesday’s trading.

According to the report, global markets are facing mounting pressure as U.S. 10-year Treasury yields climbed to their highest levels in more than a year, amid persistent inflationary concerns fueled by rising energy prices and geopolitical tensions in the Gulf region.

The report added that higher bond yields continue to enhance the attractiveness of interest-bearing assets compared to gold, which offers no direct yield, placing additional pressure on the precious metal despite ongoing geopolitical uncertainty.

The U.S. dollar also strengthened again, approaching its highest level in several weeks against a basket of major currencies, supported by escalating tensions in the Middle East and concerns over a potential renewed conflict involving Iran, further weighing on gold prices.

Markets have also started repricing expectations for U.S. monetary policy, with growing bets that the Federal Reserve could raise interest rates at least once before the end of the year, amid persistent inflationary pressures facing policymakers.

According to CME Group’s FedWatch Tool, markets are currently pricing in a 45% probability of a rate hike in December, up from just over 16% at the beginning of May. Meanwhile, expectations for the Fed to keep interest rates unchanged at its June meeting remain at 99%, while the probability of a 25-basis-point rate cut stands at only 1%.

Investors are also awaiting the release of the Federal Reserve’s meeting minutes on Wednesday for fresh signals regarding the future path of interest rates and monetary policy, in addition to upcoming U.S. economic data that could further reshape market expectations.

On the geopolitical front, the report noted that statements by U.S. President Donald Trump regarding delaying any potential attack on Iran, while signaling an opportunity to reach an agreement over Tehran’s nuclear program, reinforced caution across financial markets despite ongoing concerns surrounding the Strait of Hormuz and global energy markets.

The report concluded that markets remain highly sensitive to political and military developments in the region, with continued exchanges of rhetoric between Washington and Tehran supporting the U.S. dollar as a safe-haven asset and adding further pressure on gold prices.

It also warned that continued gains in oil prices, combined with the possibility of tighter U.S. monetary policy, could lead to further volatility in gold markets during the coming period, especially as investors closely monitor developments in the Middle East and upcoming Federal Reserve decisions.