Gold prices rose in local markets during trading on Tuesday, with the ounce rising on the global stock exchange due to the decline of the dollar and increased demand for safe havens amid concerns about trade tensions between the United States and China and bets on a Federal Reserve interest rate cut.
Gold prices rose in local markets by about EGP 10 during today's trading, compared to yesterday's closing price. The price of a gram of 21-karat gold reached EGP 4,630, while an ounce rose by about $11, reaching $3,222.
Gram of 24-karat gold reached EGP 5,291, a gram of 18-karat gold reached EGP 3,969, a gram of 14-karat gold reached EGP 3,087, and the gold pound reached EGP 37,040. Meanwhile, gold prices in local markets fell by EGP 45 during trading on Monday. A gram of 21-karat gold opened at EGP 4,665 and closed at EGP 4,620. An ounce fell by $27, opening at $3,238 and closing at $3,211.
Gold prices rose again in local markets, driven by the rise in the ounce price on the global stock exchange, the rise in the dollar exchange rate to above EGP 51 in local markets, and improved demand.
Trade tensions between the United States and China and bets on a Federal Reserve interest rate cut have boosted demand for safe haven assets, particularly with the decline of the US dollar.
The rise in demand for gold and the weakness of the dollar indicate a gradual erosion of the US currency's status as a safe haven asset and enhance the attractiveness of gold as an alternative to many dollar investors, as confirmed by recent strong inflows into the world's largest gold exchange-traded fund.
Concerns about a slowdown in global growth are growing as the trade war between the United States and China escalates. China raised tariffs on US goods to 125% in response to Washington raising tariffs on Chinese imports to 145%.
The uncertainty surrounding US tariff policy will reinforce the Fed's easing stance, as markets anticipate at least three interest rate cuts during 2025, boosting demand for gold.
Meanwhile, Federal Reserve Governor Christopher Waller said he expects the effects of President Donald Trump's tariffs on prices to be "transitory," using a term that got the central bank into trouble during the recent inflationary wave.
In a related development, markets are awaiting comments from Federal Open Market Committee members this week, including Fed Chairman Jerome Powell on Wednesday, which are expected to provide further clarity on how the central bank will address inflation risks stemming from the trade war in the second half of the year.
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