Gold prices in the local market recorded a slight decline during Saturday’s trading, despite strong weekly gains in global ounce prices, amid continued uncertainty in international markets driven by geopolitical tensions and monetary policy fluctuations, according to a report by the “Marsad El Dahab” for Economic Studies.
The report indicated that gold prices fell by about 10 Egyptian pounds compared to the previous session’s close, with 21-karat gold recording around EGP 7,165 per gram. Meanwhile, the global ounce closed the week at $4,676, achieving weekly gains of $182.
It added that 24-karat gold reached about EGP 8,189 per gram, 18-karat gold stood at EGP 6,141, while the gold pound (coin) recorded approximately EGP 57,320.
In the silver market, prices remained stable, with 999 purity silver at around EGP 135 per gram, 925 purity at EGP 125, and 800 purity at EGP 108, while the silver pound stood at approximately EGP 1,000. Globally, silver rose by 4.3% over the week to close at $73 per ounce.
The report noted that the narrowing gap between local and global gold prices to about EGP 24 contributed to the decline in local prices.
Weak sales and a shift toward exports
The report confirmed that gold markets are experiencing a noticeable slowdown and weak demand across both bullion and jewelry segments, with the latter being more significantly affected in recent periods.
It pointed out that the market saw a temporary improvement in sales ahead of and during the Eid al-Fitr and wedding season, but this momentum did not last, as ongoing fluctuations in the local exchange rate of the US dollar reinforced consumer caution.
These fluctuations have also encouraged some individuals to resell gold to benefit from current price levels, while the local market is increasingly shifting toward exports to secure liquidity and boost foreign currency inflows.
Impact of U.S. data and geopolitical tensions
The report highlighted that markets are awaiting the reopening of global trading, particularly following stronger-than-expected U.S. labor market data. Nonfarm payrolls increased by 178,000 jobs in March, surpassing expectations, while the unemployment rate declined to 4.3%.
Despite the strong headline job figures, wage growth slowed more than expected, giving the Federal Reserve room to maintain its current monetary policy stance without aggressive tightening.
The report noted that gold may face some pressure at the start of trading if markets react to the robust economic data, as continued strength in the labor market could reduce the likelihood of near-term interest rate cuts.
However, geopolitical tensions—especially in the Middle East—continue to support gold prices, given their impact on energy markets and rising oil prices, which in turn fuel global inflationary pressures.
Outlook
The report concluded that gold is currently moving within a sideways range with an upward bias, governed by a complex equation between two main factors: geopolitical tensions supporting prices, and global monetary policies exerting downward pressure.
The next direction for gold prices will largely depend on developments in the Middle East, as well as the trajectory of inflation and U.S. monetary policy decisions in the coming period.
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