Mild Rise in Local Gold Prices as Profit-Taking Caps Global Gains; Fed Expectations Support a Return to the Upside

Gold prices in the local market recorded a slight increase on Saturday during the global market’s weekend closure. This comes after a sharp 3.3% decline in international gold prices at the end of last week, driven by a stronger U.S. dollar and intense profit-taking, amid an improvement in global risk sentiment following positive signals on U.S.–China trade relations.

Said Embabi, CEO of iSagha — a platform specializing in gold and jewelry trading — said that domestic gold prices rose by around EGP 5 during today’s trading, with 21-karat gold recording EGP 5,550 per gram. Meanwhile, gold lost nearly $140 per ounce globally last week to settle at $4,114.

Embabi added that 24-karat gold recorded EGP 6,343, 18-karat reached EGP 4,757, while 14-karat stood near EGP 3,700. The price of the gold pound coin stabilized at EGP 44,400.

U.S. Inflation Data Supports Gold Rebound

Gold partially recovered on Friday after U.S. inflation figures for September came in lower than expected, strengthening bets of an imminent Fed rate cut.

U.S. CPI rose 3% year-on-year, below forecasts of 3.1%, though slightly higher than 2.9% in August. Core CPI rose 3%, lower by 0.1 percentage point from the previous month.

According to the "Prime Market Terminal" probability tool, markets now assign a 96% likelihood that the Federal Reserve will cut interest rates during its October 28–29 meeting.

Standard & Poor’s Global data also showed U.S. business activity accelerating at the second-highest pace this year, while the University of Michigan revealed a decline in consumer sentiment in its revised October reading.

The White House announced that U.S. President Donald Trump will meet with Chinese President Xi Jinping next week in South Korea, ahead of the early-November tariff deadline. Geopolitical volatility remains elevated, especially after Trump imposed sanctions on Russia over the Ukraine conflict, targeting oil giants Lukoil and Rosneft.

Strong Outlook Despite Volatility

Embabi noted that gold has delivered remarkable gains of around 57% this year, supported by geopolitical tensions, strong central bank purchases, and expectations of a more accommodative Fed policy.

Despite the decline in U.S. 10-year Treasury yields to 3.989%, and similar drops in real yields — conditions typically favorable for gold — the metal has undergone a technical correction after nine consecutive weekly gains, marking only the fourth occurrence since 1978.

Historical performance suggests that such extended rallies are often followed by short-term pullbacks, with probabilities of negative returns reaching up to 100% over some timeframes — before prices resume their upward trajectory over the long run.

Major Banks Raise Forecasts

JPMorgan expects gold to average $5,055 per ounce in Q4 2026, assuming central bank and institutional investment demand continues at around 566 tonnes per quarter.

Analysts emphasize that the latest correction is healthy and necessary, preserving the strength of the broader bullish trend unless a significant shift occurs in the macroeconomic outlook.

Analytical Outlook

The recent decline is viewed as a normal technical correction following an exceptional rally, not a fundamental change in gold’s bullish environment. Consolidation at this stage is seen as essential for sustaining longer-term price momentum.

Gold appears poised to resume its upward movement once market conditions stabilize, supported by persistent inflation risks and expectations of accommodative monetary policy — making the pullback a buying opportunity rather than the start of a lasting reversal.

However, analysts advise caution in the near term due to typical performance patterns following extended rallies, though core fundamentals remain robust, reinforcing gold’s role as a safe-haven and strategic investment asset.

Expert Commentary – Waleed Farouk

With markets experiencing rapid and frequent fluctuations, gold continues to prove itself as one of the most reliable hedges against economic and geopolitical uncertainty. Persistent inflation, policy concerns, and rising global risks suggest that any price correction remains part of a broader bullish cycle.

The rational reading of market dynamics shows that gold is entering a healthy consolidation phase, preparing for another leg higher — especially with strong institutional demand and ongoing central bank accumulation.