Weak Dollar ,Geopolitical Concerns Limit Gold's Decline in Global Markets

Gold prices declined in local markets during trading on Monday, with the ounce declining on the global stock exchange, affected by declining demand and easing concerns about global trade disruptions.

Gold prices fell in local markets by EGP 45 during trading today, compared to the closing price of the week last Saturday evening. The price of 21-karat gold reached EGP 4,665 per gram, while the price of an ounce fell by $28 to $3,330.

The price of 24-karat gold reached EGP 5,331 per gram, while the price of 18-karat gold reached EGP 3,999 per gram. The price of 14-karat gold reached EGP 3,110 per gram, and the price of the gold pound reached EGP 37,320 per gram. Gold prices in local markets rose by 3.7%, or EGP 170, during last week's trading. The price of a gram of 21-karat gold opened at EGP 4,540 and closed at EGP 4,710. Meanwhile, an ounce rose by 4.5%, or $154, opening at $3,204 and closing at $3,358.

Gold markets are witnessing a significant decline in demand during the current period, affected by rising prices and changes in consumer behavior.

The rise in local gold prices, driven by rising global prices and the decline in the value of the Egyptian pound, has led to consumers refraining from purchasing. Economic uncertainty and exchange rate fluctuations have also contributed to this decline.

Despite the current decline, some analysts expect domestic demand for gold in Egypt to increase in the coming period, driven by changes in economic policies and global market developments. Gold prices declined in global markets, affected by US President Donald Trump's decision to extend the deadline for imposing tariffs on European Union imports until July 9. This eased trade tensions and led to a decline in demand for gold as a safe haven.

This decline came after President Trump announced a postponement of the imposition of 50% tariffs on imports from the European Union.

Investor concerns about the US fiscal situation and the impact of Trump's comprehensive debt bill on debt inflation limited gold's decline.

However, gold's decline remains limited, supported by ongoing concerns about the US fiscal situation. The Congressional Budget Office expects the US federal budget deficit to expand by $4 trillion over the next decade, driven by recent tax cuts and spending increases. This growing deficit has pressured the dollar to its lowest level in a month, indirectly boosting gold, which remains attractive in a low interest rate environment. Minneapolis Federal Reserve President Neel Kashkari recently warned that prolonged tariff policies could herald stagflation, reinforcing market expectations of a dovish shift from the central bank.

While trade delays have eased market anxiety, broader geopolitical tensions continue to support safe-haven assets. Escalating conflicts in Eastern Europe and ongoing unrest in the Middle East have supported demand for gold and silver as investors hedge against uncertainty.

In the near term, traders are likely to remain cautious, awaiting clarification from Wednesday's Federal Open Market Committee meeting minutes, which could provide additional insights into the Fed's timeline for interest rate cuts.

In related news, markets are also awaiting the release of durable goods orders data, the minutes from the Fed's last meeting, the second estimate of gross domestic product, and the Fed's preferred inflation measure, the core personal consumption expenditures price index.