Gold prices declined in local markets during today's trading, Monday, despite the rise of the ounce on the global exchange. This comes amidst a state of volatility that dominated the markets at the start of trading, with expectations of easing tensions related to U.S. Federal Reserve policy, following reports of a possible ceasefire in the Middle East, according to the report issued by the "Marsad El Dahab" for Economic Studies.
Dr. Walid Farouk, a researcher in gold and jewelry affairs and Director of the "Gold Observatory," said that gold prices in the local market fell by about 10 EGP during today's trading compared to the close of last week's trading on Saturday evening. The price of a gram of 21-karat gold recorded a level of 7,140 EGP, while the global ounce rose by about $14 to record a level of $4,690.
He added that the price of a gram of 24-karat gold recorded about 8,160 EGP, 18-karat gold recorded 6,120 EGP, while the price of the gold pound reached about 57,120 EGP.
The report pointed out that gold prices in the local market had risen by about 225 EGP during the past week, and the global ounce also rose by about $182 during the same period.
The report explained that gold prices in the local markets are currently trading at a discount of up to 55 EGP compared to the global price, as a result of a decline in local demand and the continued state of uncertainty in the markets with ongoing geopolitical tensions.
On the silver front, the report noted an increase in the price of a gram of silver by about one pound, with the price of 999-karat silver recording about 136 EGP, 925-karat about 126 EGP, and 800-karat about 109 EGP, while the silver pound recorded about 1,008 EGP, despite the global ounce stabilizing at the level of $73.
Silver prices in the local market had risen by about 5 EGP during the week, while the global ounce rose by about $3.
The report explained that global gold prices reversed their direction with the opening of Monday's trading, rising to the level of $4,690 per ounce after touching the $4,700 level, compensating for its early losses during which it dropped to $4,631.
Markets had started trading on a decline, affected by the rise of the dollar and declining expectations regarding an imminent cut in U.S. interest rates, in light of strong U.S. jobs data and rising oil prices due to the continuation of the war. However, gold succeeded in bouncing upwards, driven by increased demand for safe havens, turning its losses into noticeable gains despite weak liquidity due to the closure of a number of global markets for holidays.
Bloomberg reported that the United States, Iran, and regional mediators are discussing terms for a possible 45-day ceasefire, which could pave the way for an end to the fighting. This could weaken the dollar as a safe haven and support gold prices, as the yellow metal attracted buyers when prices dropped near the $4,600 level.
On the other hand, expectations of rising global interest rates still limit gold's gains, as rising energy prices as a result of the war could bring back inflationary pressures. This might push major central banks, led by the U.S. Federal Reserve, to maintain tight monetary policy for a longer period.
Oil prices also rose to their highest levels in about four weeks after U.S. President Donald Trump threatened to target Iranian energy facilities and bridges if the Strait of Hormuz is not reopened, while Tehran hinted at the possibility of resuming passage through the strait, provided that a portion of the revenues is allocated to compensate it for war damages.
Iranian leaders warned of the possibility of targeting the Bab al-Mandab Strait in the Red Sea, increasing the risks of global trade disruption and supporting the rise in oil prices.
At the same time, the strong U.S. non-farm payrolls report bolstered expectations that the Federal Reserve will continue to keep interest rates high for a longer period to counter inflation, which supports the dollar and limits gold's gains.
Traders have almost ruled out the possibility of U.S. interest rate cuts during the current year, after expectations before the outbreak of the war indicated the possibility of implementing two rate cuts this year.
Markets are awaiting a number of important economic data during the coming period, including the Services Purchasing Managers' Index (PMI), U.S. durable goods orders, Federal Reserve meeting minutes, the Personal Consumption Expenditures (PCE) index, and the Consumer Price Index (CPI). This data will have a direct impact on interest rate expectations and consequently on the direction of global gold prices.
Follow the latest news on Google News
