Gold prices registered a limited upward movement during midday trading on Thursday, supported by global market volatility and the rising US Dollar, as investor expectations for the Federal Reserve to cut interest rates in December retreated, according to a report issued by the "I Sagha" platform for gold and jewelry trading.
Saeed Embaby, the CEO of the platform, stated that gold in the local market increased by about 10 EGP compared to yesterday's closing, with the price of 21-carat gold reaching EGP 5,475 per gram, while the global ounce rose by about $18 to settle at $4,093.
He added that the price of 24-carat reached EGP 6,257, and 18-carat recorded EGP 4,693, while the Gold Pound stabilized at EGP 43,800.
Dollar Pressure and Mixed US Employment Data
Gold traded in a narrow range on Thursday, as traders digested a mix of delayed and mixed US economic data regarding the labor market in September. The announcement of strong earnings by Nvidia supported investor sentiment, which boosted stock markets and relatively weakened safe-haven flows into gold.
The rise of the US Dollar and the retreat of December rate cut bets also pressured the precious metal, after markets sharply repriced their expectations following the Bureau of Labor Statistics' confirmation that the October employment report would be released concurrently with November data.
The minutes from the Federal Open Market Committee (FOMC) meeting, released yesterday, Wednesday, showed a more hawkish tone, with policymakers confirming that inflation is still above the 2% target and that progress toward lowering it has become slower. A number of members indicated that a December rate cut might not be appropriate.
Details of US Employment Data
Nonfarm Payrolls (NFP) for September rose by 119,000 jobs, exceeding the forecast of a 50,000 increase.
The August reading was revised to a decline of 4,000 jobs instead of the previously announced increase of 22,000 jobs.
The unemployment rate rose to 4.4%, exceeding the 4.3% estimate, and stable compared to the previous month.
Average hourly earnings rose by 0.2% month-over-month in September, slightly less than the 0.3% forecast and below the previous 0.4% increase.
On an annual basis, wages grew by 3.8%, matching the previous reading and exceeding the 3.7% forecast.
Average weekly hours stabilized at 34.2, in line with expectations.
The US Bureau of Labor Statistics (BLS) confirmed on Wednesday the postponement of the October payroll report after the government shutdown prevented officials from collecting key data, including the inputs needed to calculate the unemployment rate. The missing October figures will now be released with the November jobs report on December 16, reducing the data available to the Federal Reserve before the FOMC meeting on December 9-10.
According to the CME FedWatch tool, markets are pricing in a 31.8% chance of a December rate cut, down from about 50% a week ago. Attention is now focused on the delayed September Nonfarm Payrolls (NFP) report, which could change expectations again. Economists anticipate a rise of about 50,000 jobs, compared to the 22,000 increase recorded in August.
Russia: Gold Sales and Purchases Rise Locally to Meet Budget Needs
In a parallel development, the Russian Central Bank revealed an increase in gold-related transactions in the local market in recent years, both buying and selling for the National Wealth Fund (NWF), the budget reserve that Moscow relies on to finance expenditures, especially amid Western sanctions.
The bank explained that the freezing of Russian assets in USD and EUR prompted the fund to rely on the Yuan and Gold as alternative usable liquid assets.
The Central Bank stated in a release: "Given the high liquidity of the local gold market in recent years, the bank is conducting equivalent operations involving the purchase and sale of gold, and not just transactions related to the Yuan against the Ruble."
The bank noted that it is unable to purchase gold globally due to sanctions, despite Russia being the world's second-largest gold producer after China, and that previously weak liquidity limited the volume of operations.
According to official data, the liquid assets of the National Wealth Fund (Gold + Yuan) amounted to about $51.6 billion (1.9% of GDP) as of November 1. These assets can also be used to cover the budget deficit.
The fund's gold and foreign currency holdings are counted among the Central Bank's reserves, which total about $720 billion, including frozen assets. Gold represents more than 41% of the total reserves.
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