Weak Dollar Boosts Gold's Appeal

Gold prices rose in local markets during trading on Monday, with the ounce rising on the global stock exchange due to increased demand, a weak dollar, and market anticipation of the US Federal Reserve's decision on interest rates and monetary policy directions in the coming period.

Gold prices rose in local markets by about EGP 85 compared to the close of trading last Saturday, with the price of 21-karat gold reaching EGP 4,720 per gram, while the price of an ounce rose by about $77, reaching $3,318 per gram.

24-karat gold reached EGP 5,394 per gram, 18-karat gold reached EGP 4,046 per gram, while 14-karat gold reached EGP 3,147 per gram, and the gold pound reached EGP 37,760 per gram.

The rise in gold prices in local markets was driven by the rise in the ounce on the global stock exchange, amid a stable dollar exchange rate and stable domestic demand. He added that the ounce opened the week with strong gains, driven by increased demand. The weak dollar and investors' focus on the Federal Reserve's monetary policy meeting this week have renewed interest in safe-haven hedging.

The dollar declined following the release of weak US GDP data, increasing expectations of an interest rate cut by the Federal Reserve, especially with the continued impact of inflation and geopolitical tensions.

While many analysts expect the Federal Reserve to keep interest rates unchanged at its meeting next Wednesday, there is political pressure from US President Donald Trump to cut interest rates.

On Sunday, Trump again expressed his dissatisfaction with the Federal Reserve and its Chairman, Jerome Powell, after describing Powell as "hawkish." The US President called on members of the Federal Open Market Committee to pressure Powell to cut interest rates.

Markets will also be awaiting the US Federal Reserve meeting and Jerome Powell's statements during his press conference for strong signals on the timing and pace of potential interest rate cuts this year, which will determine the fate of gold prices. Gold plays a role as a hedge against inflation risks and political uncertainty. Meanwhile, Goldman Sachs said that strong central bank gold purchases, slowing solar energy production in China, and rising risks of a US recession are likely to keep gold's performance high in the coming period.