Slight Rise in Local Gold Prices Ahead of Key Federal Reserve Decision

Gold prices in the local market recorded a slight increase during Wednesday’s trading, despite a mild retreat in global spot prices, as markets awaited the U.S. Federal Reserve’s interest rate decision later today, according to a report by the “iSagha” gold and jewelry trading platform.

Saeed Embabi, CEO of iSagha, said that local gold prices rose by EGP 5, pushing the price of 21-karat gold—the most widely traded—to EGP 5,620.

Meanwhile, 24-karat stood at EGP 6,423, 18-karat at EGP 4,817, and the gold pound coin remained stable at EGP 44,960.

Globally, spot gold declined by $17, registering $4,195 per ounce, ahead of the Federal Reserve’s anticipated policy announcement.

Markets Brace for Expected Rate Cut

The Federal Reserve is widely expected to deliver a third consecutive 25-basis-point rate cut today, which would bring the federal funds rate down to a range between 3.50% and 3.75%.

Lower borrowing costs generally support gold prices, as reduced interest rates decrease the opportunity cost of holding non-yielding assets such as gold.

However, rising expectations of a more aggressive rate-cut path have pushed U.S. Treasury yields higher across the curve—an unfavorable factor for gold—while market forecasts now imply limited chances of further policy easing in early 2026.

All eyes will be on Federal Reserve Chair Jerome Powell’s press conference, along with the updated dot plot and economic projections, which are expected to offer clearer guidance on the pace of monetary adjustments in early 2026.

Dollar Steady, Treasury Yields Climb

The U.S. dollar held steady ahead of the announcement, with the U.S. Dollar Index trading slightly above 99.00.

Meanwhile, yields on the benchmark 10-year U.S. Treasury rose to 4.20%, their highest level since September.

The Federal Reserve has already eased policy twice this year—in September and October—through 25-basis-point cuts described by officials as “risk-management reductions,” intended to support the economy amid signs of cooling in the labor market.

The Fed’s September dot plot showed expectations for one rate cut each in 2026 and 2027, no adjustments in 2028, and a long-run rate of 3.0%.

According to the CME FedWatch Tool, markets currently price a 90% probability of a 25-basis-point cut today.

Expectations for additional near-term easing remain limited, with only a 20% chance for another cut in January, rising to 33% in March and 37% in April.

Policy Split Inside the Fed … and Search for a New Chair Begins

Powell indicated in October that an increasing number of committee members favored pausing further action, citing uncertainty in economic conditions. Since then, policymakers have grown more divided—some warning of persistent inflation risks, while others point to a gradual cooling in the labor market.

Traders will be watching voting patterns closely to gauge whether the committee is leaning toward a more hawkish or dovish stance as 2026 approaches.

In a related development, the Financial Times reported Tuesday that President Donald Trump is preparing to begin the final round of interviews to select the next Federal Reserve Chair.

Administration officials told the newspaper that Kevin Hassett, Director of the National Economic Council, remains the leading candidate to succeed Jerome Powell when his term ends in May.