Marsad Al Dahab revealed that gold is currently experiencing its third major correction since the beginning of 2026, while prices stabilized in Egypt's local market during Thursday's trading following the sharp losses recorded a day earlier. Meanwhile, global gold prices continue to trade near the $4,000-per-ounce level as investors await the release of the U.S. Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred inflation gauge, which is expected to determine the next direction of interest rates and, consequently, the outlook for gold prices.
According to Marsad Al Dahab, the price of 21-karat gold stabilized at EGP 5,640 per gram, while 24-karat gold traded at EGP 6,446, 18-karat gold at EGP 4,834, and the gold sovereign at EGP 45,120. In global markets, spot gold edged slightly lower to around $3,987 per ounce at the time of writing.
The report noted that the local market is still absorbing the impact of Wednesday's sharp sell-off, during which 21-karat gold lost around EGP 185 per gram in a single session, while spot gold fell by approximately $152 per ounce, approaching its lowest level since November.
Marsad Al Dahab added that Egypt's local gold premium continued to decline to around EGP 95 per gram, while the U.S. dollar exchange rate in local banks eased to approximately EGP 49.77, amplifying the decline in domestic gold prices beyond the losses recorded in international markets.
Since the beginning of June, local gold prices have fallen by approximately EGP 1,125 per gram, representing a decline of nearly 16.6%, after 21-karat gold opened the month at EGP 6,765. Over the same period, global gold prices have dropped by around $560 per ounce, or nearly 12.3%, from an opening level of $4,540.
The report also noted that Egyptian gold prices have erased all gains recorded since the beginning of 2026, entering negative territory for the first time this year. Twenty-one-karat gold opened 2026 at EGP 5,830 per gram and has since declined to EGP 5,640, representing a loss of EGP 190, or approximately 3.3%. Globally, gold has lost around $338 per ounce, equivalent to roughly 7.8% since the start of the year.
The Third Major Gold Correction of 2026
Marsad Al Dahab believes that the current decline is not an extraordinary event but rather the third major correction the gold market has witnessed since the beginning of 2026, following a year marked by heightened volatility driven by shifting expectations regarding U.S. monetary policy and investor sentiment.
The first correction occurred at the end of January after gold reached record highs, when aggressive profit-taking pushed prices down by more than 10% within a short period, making it one of the sharpest corrections in recent years.
The second correction unfolded during March as markets repriced expectations for U.S. interest rates, triggering another wave of selling that drove gold toward the $4,100-per-ounce level.
The third correction began in June as investors increasingly priced in a prolonged period of restrictive U.S. monetary policy, rising real Treasury yields, and continued strength in the U.S. dollar. These factors caused gold to break several key technical support levels, resulting in a decline exceeding 11% within a matter of weeks.
Marsad Al Dahab noted that what distinguishes the current correction is that it has not been driven solely by global pressures. It has also coincided with a decline in Egypt's local premium and an appreciation of the Egyptian pound, making local gold losses significantly larger than those recorded internationally.
Why Is Gold Falling?
The report attributes the current pressure on gold to several simultaneous factors, most notably the strength of the U.S. dollar, rising real Treasury yields, and fading expectations for Federal Reserve rate cuts during the second half of the year. These developments have reduced gold's appeal as a non-yielding asset.
Markets are now awaiting the release of the U.S. Personal Consumption Expenditures (PCE) inflation data. A stronger-than-expected reading could reinforce expectations for continued monetary tightening—and potentially another interest rate increase before year-end—keeping pressure on gold. Conversely, weaker inflation data could provide the precious metal with an opportunity to stabilize after its recent sell-off.
World Gold Council: The Current Decline Is a Correction, Not the End of the Bullish Trend
This assessment is broadly consistent with the World Gold Council's view that the current decline represents a temporary price correction rather than the beginning of a long-term bearish trend, emphasizing that the structural fundamentals supporting gold remain intact.
According to Andrew Naylor, Head of Middle East and Public Policy at the World Gold Council, current pressure stems from the strength of the U.S. dollar, higher opportunity costs associated with holding gold due to slower interest-rate cuts, and weaker physical demand from China and India.
However, he stressed that continued central bank purchases, elevated global debt levels, and persistent geopolitical risks remain strong long-term pillars supporting gold prices.
The latest World Gold Council survey also showed that 45% of central banks intend to increase their gold reserves over the next 12 months, while the majority expect global official gold holdings to continue rising.
Global Banks Cut Targets but Maintain Bullish Long-Term Outlook
Despite the recent correction, major international financial institutions have recalibrated their gold price forecasts rather than abandoning their positive long-term outlook.
Institutions including Goldman Sachs, Deutsche Bank, Bank of America, BMO Capital Markets, and Macquarie have revised their price expectations to reflect the prospect of a longer period of restrictive U.S. monetary policy, while continuing to project historically elevated gold prices over the medium and long term.
Technical Analysts Warn of Continued Short-Term Pressure
From a technical perspective, analysts at Societe Generale believe that gold's break below its 200-day moving average and several important support levels has accelerated the current sell-off. The bank expects prices to test a major support zone between $3,930 and $3,885 per ounce.
Meanwhile, analysts at OCBC believe that persistently high real U.S. bond yields and continued outflows from gold exchange-traded funds (ETFs) could keep pressure on prices in the short term, despite maintaining a constructive medium-term outlook.
History Repeats Itself
Marsad Al Dahab noted that gold has experienced numerous sharp corrections over previous decades, yet most of them did not mark the end of its long-term upward trend. Instead, the precious metal has historically moved through recurring cycles of advances and corrections that reflect changing macroeconomic conditions and monetary policy expectations.
The report added that sharp price declines often create significant investor anxiety but also underscore the importance of making investment decisions based on sound economic fundamentals rather than emotional reactions to short-term market volatility.
Historically, major corrections have frequently formed part of gold's normal market cycle rather than signaling the end of its long-term trajectory, with future price direction remaining closely linked to global macroeconomic developments and central bank policies.
Marsad Al Dahab's Outlook
Marsad Al Dahab believes that the current market environment represents the third major correction of 2026, driven primarily by monetary and financial factors rather than any fundamental deterioration in gold's long-term investment case.
Most international financial institutions also agree that today's pressures are largely the result of changing expectations regarding U.S. monetary policy rather than structural weakness in gold's long-term fundamentals, particularly given continued central bank purchases, geopolitical uncertainty, and elevated global debt.
Looking ahead, the direction of gold prices during the second half of 2026 will depend primarily on U.S. inflation data, Federal Reserve policy decisions, movements in the U.S. dollar, continued investment demand, and central bank buying—factors that will determine whether the current correction is approaching its end or has further room to extend.
Follow the latest news on Google News
