Gold prices rose in local markets by 3.7% during trading last week, ending Saturday evening. The ounce rose by 4.5% during trading last Friday evening, supported by a number of political and economic factors, most notably the weakness of the US dollar.
Gold prices rose in local markets by EGP 170 during trading last week, with the price of a gram of 21-karat gold opening at EGP 4,540 and closing at EGP 4,710. The price of an ounce rose by $154, opening at $3,204 and closing at $3,358.
The price of a gram of 24-karat gold reached EGP 5,383, while the price of a gram of 18-karat gold reached EGP 4,037. The price of a gram of 14-karat gold reached EGP 3,140, and the price of a gram of gold reached EGP 37,680. Gold prices in local markets fell by EGP 5 during trading on Saturday, with the price of a gram of 21-karat gold opening at EGP 4,715 and closing at EGP 4,710, coinciding with the global stock market's weekly holiday.
Gold prices recorded a significant increase in local and global markets, supported by a number of political and economic factors, most notably the weakness of the US dollar, President Trump's escalating statements regarding the European Union, and growing concerns about the US financial situation.
Trump threatened to impose 50% tariffs on EU imports starting in June, escalating trade tensions. At the same time, the passage of a high-deficit US budget of $4 trillion, along with a downgrade of the US debt rating by Moody's, raised investor anxiety, pushing them towards safe-haven assets, most notably gold. Despite a slight decline from its all-time high, gold maintained strong support near $3,300 per ounce, ending the week up 4.5%, driven by a weaker dollar and declining confidence in US debt instruments.
US building permits fell 4% in April, while new home sales rose 10.9%, reflecting volatility in economic indicators. Treasury bond auctions also showed significant weakness, amid a rise in 20- and 30-year yields, further inverting the yield curve.
VanEck Gold & Precious Metals forecasts that gold will reach $4,000 by 2025, with the possibility of reaching $5,000 within five years, supported by the return of Western investors and the increasing role of gold as a hedge against inflation and geopolitical risks. Despite gold achieving gains of approximately 27% in 2023 and 25.5% since the beginning of 2024, its share of global assets under management remains less than 1%. The European Central Bank has warned of potential risks resulting from the sudden surge in investment demand for gold, citing structural weaknesses in the market. However, World Gold Council analysts emphasize the market's resilience, pointing to gold's liquidity and stability even in times of crisis.
Amid mounting concerns about governments' ability to contain sovereign debt and growing doubts about traditional debt instruments, gold is once again strengthening its position as a reliable monetary asset and a safe haven investment. As investors await upcoming Federal Reserve data and monetary policy developments, gold appears poised to continue its strong performance, supported by a host of catalysts that enhance its long-term appeal.
In related news, markets are awaiting the release of durable goods orders data, the minutes of the last Federal Reserve meeting, the second estimate of GDP, and the Fed's preferred inflation measure, the core personal consumption expenditures price index.
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