Local gold prices rise 0.5% weekly as global ounce gains 1.6% on softer U.S. inflation data

Gold prices in the Egyptian market increased by 0.5% over the past week, in line with a 1.6% rise in the global ounce, supported by U.S. economic data that strengthened expectations of upcoming interest rate cuts, according to a report issued by iSagha.

Saeed Embabi, CEO of the platform, said that 21-karat gold rose by EGP 35 خلال الأسبوع, opening at EGP 6,675 per gram and closing at EGP 6,710. Globally, the ounce gained $78, rising from $4,965 to $5,043 by the end of the week.

According to the report, 24-karat gold recorded EGP 7,669 per gram, while 18-karat stood at EGP 5,751. The gold pound (8 grams of 21-karat) reached approximately EGP 53,680.

U.S. inflation supports rate-cut expectations

The main catalyst came from U.S. inflation data. The U.S. Bureau of Labor Statistics reported that the Consumer Price Index rose 2.4% year-on-year in January, below expectations of 2.5% and down from 2.7% in December. Core inflation, which excludes food and energy, eased to 2.5% year-on-year from 2.6%.

These figures reinforced market expectations that the Federal Reserve could begin a monetary easing cycle as early as June, particularly as inflationary pressures continue to moderate after peaking at 3% last September.

At the same time, nonfarm payrolls showed an increase of more than 130,000 jobs in January, while the unemployment rate declined to 4.3%, signaling continued labor market resilience and giving the Fed greater flexibility in timing rate cuts.

Markets now price in roughly a 55% probability of a 25-basis-point rate cut in June. Meanwhile, the yield on the 10-year U.S. Treasury note fell to 4.06%, down 14 basis points over the week, providing a supportive environment for gold prices.

Geopolitical shifts and monetary repositioning

In a notable development, an internal Kremlin memo cited by Bloomberg revealed proposals for Russia to re-engage with the U.S. dollar settlement system as part of broader economic partnerships with the administration of Donald Trump, marking a potential strategic shift after years of de-dollarization efforts.

Conversely, China continues to reduce its exposure to U.S. assets. Official holdings of U.S. Treasuries declined to $682.6 billion — the lowest level since 2008 — alongside official encouragement to increase gold allocations within reserves.

Extreme volatility and trading opportunities

Markets have witnessed sharp swings in recent days. Gold fell by 21% to $4,400 before rebounding to $5,000 in less than 48 hours, marking a recovery of more than 17%. Earlier in the month, daily gains of nearly 11% and 9% were recorded, highlighting elevated volatility.

Lars Hansen, Head of Research at The Gold & Silver Club, described the current environment as a “golden era for trading,” noting that volatility is creating exceptional opportunities for those capable of managing risk and identifying trends.

Historic start to 2026 with China at the center

Globally, gold began 2026 with one of its strongest performances in decades. The LBMA Gold Price PM in USD recorded its highest January level since 1980, while the benchmark PM price at the Shanghai Gold Exchange in renminbi posted its strongest start to a year on record, according to Ray Jia, Head of Research for Asia-Pacific (excluding India) at the World Gold Council.

Although prices pulled back in late January and early February, gold found strong support around the key levels of $5,000 per ounce and RMB 1,000 per gram, as consumers and investors stepped in to buy on dips.

Withdrawals from the Shanghai Gold Exchange reached 126 tonnes in January, slightly higher year-on-year, supported by strong bullion sales and jeweler restocking ahead of the Lunar New Year holiday.

Chinese gold ETFs also saw record inflows of RMB 44 billion (approximately $6.2 billion), pushing total assets under management to RMB 333 billion, while holdings climbed to a record 286 tonnes.

On the derivatives side, average daily trading volumes of gold futures on the Shanghai Futures Exchange reached 456 tonnes in January, up 17% month-on-month.

Meanwhile, the People’s Bank of China extended its gold-buying streak for the fifteenth consecutive month, adding 1.2 tonnes to bring total official holdings to 2,308 tonnes, representing 9.6% of total reserve assets.

Outlook

With the Lunar New Year holiday approaching, demand for jewelry and bullion is expected to improve, supported by gifting and self-reward purchases, although elevated price levels may limit volume growth.

Overall, current developments suggest that global markets are reassessing the balance between the dollar and gold amid diverging strategies among major powers. In an environment of heightened uncertainty and volatility, gold remains the primary beneficiary, reaffirming its traditional role as a safe-haven asset during periods of structural transformation.