Marsad Al Dahab revealed that gold prices in the Egyptian local market declined by 2.5% during the first half of 2026, while global gold prices fell by around 7%, marking one of the most volatile periods the gold market has witnessed in recent years. The precious metal shifted from a historic rally during the first quarter to a sharp correction in the second quarter that erased all gains made since the beginning of the year, ending the first half below its opening levels both locally and internationally.
The first half of 2026 was not merely a period of declining gold prices; it represented a major turning point in the precious metal's trajectory. Markets completely repriced gold under the influence of changing U.S. monetary policy, a stronger U.S. dollar, and higher U.S. Treasury yields. Meanwhile, Egypt's gold market experienced a more complex reaction due to exchange rate movements, strong domestic demand, and changes in supply, all of which influenced price movements and pricing mechanisms throughout the first six months of the year.
said that the price of 21-karat gold opened 2026 at EGP 5,830 per gram, before reaching an all-time high of EGP 7,600 on March 2. It then fell to EGP 5,600 on June 25, its lowest level since December 4, 2025, before closing the first half at EGP 5,685 per gram, down EGP 145 from the beginning of the year and EGP 1,915 below its annual peak.
The report added that global gold prices declined by approximately US$301, or 7%, during the first half of 2026. Gold opened the year at US$4,318 per ounce, climbed to a historic record of US$5,626 on January 29, then dropped to a low of US$3,959 on June 24, before ending the first half at US$4,017 per ounce—a decline of US$301 compared with the opening price and more than US$1,609 below its record high.
The report explained that this dramatic shift was not driven by a single factor, but rather by a fundamental change in market priorities. Investors moved away from pricing geopolitical risks and began focusing primarily on U.S. monetary policy expectations. This strengthened the U.S. dollar, pushed Treasury yields higher, and triggered one of the fastest gold repricing cycles witnessed in recent years.
The report noted that the different timing of the price peaks in the global and Egyptian markets reflects the unique pricing dynamics of Egypt's gold market. Local prices are influenced not only by international gold prices but also by the exchange rate of the U.S. dollar, domestic demand, market supply, and the local price premium. As a result, Egyptian gold prices continued to rise until early March, even though global gold prices had already peaked at the end of January.
June Trading: The Real Turning Point
Marsad Al Dahab stated that local gold prices fell by approximately EGP 1,080, or 16%, during June. The price of 21-karat gold opened the month at EGP 6,765 per gram, dropped to a monthly low of EGP 5,600, before recovering part of its losses to close June at EGP 5,685 per gram.
Globally, gold declined by approximately US$523, or 11.5%, during June. The precious metal opened the month at US$4,540 per ounce, reached a monthly high of US$4,595, then plunged to US$3,959 on June 24, before ending the month at US$4,017 per ounce.
The report emphasized that June was not simply the month that recorded the largest price losses during the first half of the year; it represented the genuine turning point in market direction as investors shifted from pricing geopolitical risks to pricing the likelihood of prolonged U.S. monetary tightening.
This transition coincided with the continued strength of the U.S. dollar, rising Treasury yields, diminishing expectations for interest rate cuts, and widespread profit-taking following the record highs achieved by gold earlier in the year. Together, these factors pushed the market from a powerful rally into a broad repricing phase.
The U.S. Dollar and Interest Rates: The Primary Drivers of the Correction
Marsad Al Dahab stressed that understanding what happened in the gold market during the first half of 2026 requires recognizing the fundamental shift in investors' priorities.
At the beginning of the year, markets were primarily focused on geopolitical risks, safe-haven demand, and continued gold purchases by central banks, all of which provided strong support for the precious metal and pushed prices to record highs.
As the months progressed, however, investors' attention shifted toward U.S. monetary policy. Growing expectations that interest rates would remain elevated for a longer period—and even the possibility of additional rate hikes—boosted the attractiveness of the U.S. dollar and U.S. Treasury securities, reducing investment demand for gold, a non-yielding asset.
The report added that the U.S. Dollar Index (DXY) remained above the 100-point level throughout most of June, increasing the cost of purchasing gold for investors outside the United States. At the same time, elevated Treasury yields attracted capital away from the precious metal.
He noted that profit-taking following the record highs reached by gold in January and early March further intensified selling pressure, while declining short-term investment inflows accelerated the correction.
The report also pointed out one of the most striking developments during the first half of the year: geopolitical tensions—which have historically been among the strongest drivers of gold prices—became an indirect source of pressure this time. Rising geopolitical tensions pushed energy prices higher and fueled inflation concerns, reinforcing expectations that the Federal Reserve would maintain a restrictive monetary policy. Consequently, higher interest rates exerted a stronger influence on gold prices than traditional safe-haven demand.
The report explained that monetary policy played a decisive role in shaping gold's performance during the first half of 2026. Throughout the period, the Federal Reserve left interest rates unchanged, maintaining the target range at 3.50%–3.75% during its January, March, April, and June meetings.
Meanwhile, the Central Bank of Egypt (CBE) reduced interest rates by 100 basis points at its February meeting, lowering the overnight deposit and lending rates to 19.00% and 20.00%, respectively, before keeping rates unchanged during its May meeting.
The report said this divergence between U.S. and Egyptian monetary policy had a direct impact on gold prices. Global markets repriced gold as expectations grew that the Federal Reserve would maintain its restrictive stance—and potentially raise rates again before year-end—strengthening the U.S. dollar and lifting Treasury yields.
At the same time, Egypt's gold market came under additional pressure from declining international gold prices, the appreciation of the Egyptian pound, a narrowing local price premium, and changing demand patterns, all of which intensified downward pressure on domestic gold prices.
Egypt's Gold Market: Why Did Local Prices Behave Differently?
Marsad Al Dahab emphasized that Egypt's gold market was never driven solely by international gold prices. Instead, it was influenced by a combination of domestic factors, most notably the exchange rate of the U.S. dollar, local demand, and market supply. As a result, local price movements occasionally diverged from global trends.
The report explained that the Egyptian market experienced strong buying activity during the first quarter, particularly during the record-breaking rally in January and early March. Demand was concentrated in gold bars and bullion coins as preferred savings and hedging instruments, supporting continued price increases locally despite periods of weakness in global gold prices.
However, the sharp decline witnessed during the second quarter created a cautious atmosphere and weakened confidence among a segment of consumers—particularly those who had purchased gold at historically high prices. Many chose to postpone buying decisions while waiting for clearer market direction.
As prices began to stabilize, demand gradually returned through phased purchases and opportunistic buying during price declines.
The report noted that demand became noticeably stronger again toward the end of May and the beginning of June, particularly for gold bars, bullion coins, and smaller-weight products, as many investors considered prices more attractive after the substantial correction.
This renewed demand temporarily resulted in shortages of certain smaller-weight bullion products and prompted a number of dealers to reintroduce reservation systems for purchases, although on a much smaller scale than during the market's peak.
The Local Price Premium: Sharp Fluctuations Throughout the First Half
Marsad Al Dahab explained that the local price premium experienced significant volatility during the first half of 2026, driven by changes in domestic demand, market supply, and movements in global gold prices.
The average premium stood at approximately EGP 156 per gram, representing an increase of nearly 289% compared with the beginning of the year.
At the start of 2026, the premium was approximately EGP 54 per gram, when the price of 21-karat gold stood at EGP 5,830 per gram, while the international gold price was US$4,318 per ounce.
The report added that the premium reached its highest level on March 23, climbing to approximately EGP 427 per gram, despite international gold prices declining to US$4,459 per ounce.
At that time, the official exchange rate published by the Central Bank of Egypt stood at approximately EGP 52.42 per U.S. dollar. Meanwhile, extreme volatility in international markets prompted a number of raw gold traders to suspend pricing temporarily, while the local market witnessed a sharp increase in hedging premiums as trading conditions became increasingly unstable.
As market supply gradually improved and demand moderated, the premium narrowed once again, falling to around EGP 210 per gram by the end of the first half of the year.
The report emphasized that movements in Egypt's gold market cannot be explained solely by international gold prices. Instead, they reflected the simultaneous interaction of three major factors: declining global gold prices, the retreat of the U.S. dollar exchange rate in Egypt from its March peak, and changing domestic demand conditions. Together, these factors transmitted the global correction into the Egyptian market during the final weeks of the first half.
What Lies Ahead for Gold in the Second Half of 2026?
According to Marsad Al Dahab, gold prices during the second half of 2026 will remain primarily dependent on three key variables:
The monetary policy decisions of the U.S. Federal Reserve.
The performance of the U.S. dollar.
Geopolitical developments.
These factors will be complemented by the pace of continued gold purchases by central banks around the world.
The report expects market volatility to remain elevated throughout the second half of the year, with gold prices becoming increasingly sensitive to U.S. economic data rather than to the traditional factors that have historically supported the precious metal.
In Egypt, gold prices will continue to depend on developments in international gold prices, movements in the U.S. dollar exchange rate, and domestic demand conditions, suggesting that price fluctuations are likely to persist in the months ahead.
Marsad Al Dahab believes that gold continues to maintain its position as one of the world's most important long-term stores of value and hedging instruments. However, the current market environment requires greater discipline in investment decisions and avoiding emotionally driven reactions to short-term price movements.
The report also recommends phased purchasing as one of the most appropriate investment strategies during periods of heightened volatility, while emphasizing that long-term investment remains the most effective approach for absorbing the cyclical fluctuations that characterize the gold market.
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