Weekly Global Price Surge of 1.6% and Local Stability During Market Holiday

Gold prices witnessed a state of relative stability in the local market during Saturday's trading, coinciding with the weekly holiday of global exchanges. This follows the global ounce recording weekly gains of approximately 1.6%, supported by a declining dollar and growing optimism regarding U.S.-Iranian talks, alongside U.S. inflation data that limited expectations for monetary easing during 2026, according to the "Marsad al-Dhahab" report for economic studies.

Dr. Walid Farouk, a researcher in gold and jewelry affairs and director of the "Marsad al-Dhahab," stated that the price of 21-karat gold stabilized at 7,170 EGP, while the gold ounce on the global exchange rose by about $74 during trading, after closing the week at $4,750. He added that the price of 24-karat gold reached approximately 8,194 EGP, 18-karat gold recorded 6,146 EGP, while the price of the gold coin (Gold Pound) reached 57,360 EGP.

He pointed out that gold prices fell by about 20 EGP during Friday's trading, as 21-karat gold opened at 7,190 EGP, touched the level of 7,200 EGP, and closed at 7,170 EGP. Meanwhile, the global ounce fell by about $18, opening at $4,768 and closing at $4,750. Farouk explained that the local markets are experiencing relative stability, coinciding with the closure of several raw gold traders' shops from Friday to Monday for the Coptic Christian holiday celebrations.

He noted that sales movement recorded a noticeable improvement last week, supported by the holiday season, particularly Mother's Day, in both jewelry and bullion, with the latter showing relative superiority according to market dealers. He also drew attention to the continued price gap between the local and global markets, currently estimated at about 86 EGP in favor of lower local prices. Regarding silver, local prices stabilized, with 999-grade recording 133 EGP, 925-grade at 123 EGP, and 800-grade at 107 EGP, while the silver coin reached 984 EGP. Globally, the silver ounce rose by about $3 (4%), settling at $76 at the end of the week.

Gold prices continued to achieve gains for the third consecutive week, despite volatility resulting from oil price fluctuations. This performance followed the announcement of a temporary two-week truce between the United States and Iran, which partially eased pressure on precious metals. This trend reflects a shift in the gold pricing mechanism, as geopolitical tensions are no longer the sole influencing factor; price movement has become more complex with the overlap of oil, inflation, monetary policy, and dollar strength, amid market anticipation for the post-truce period to determine the next direction.

Although a decrease in tensions usually reduces demand for gold as a safe haven, its rise at this stage was linked to falling oil prices, which calmed inflation fears and reinforced expectations for interest rate cuts—a direct support for gold. This data confirms that gold movements have become linked to an interconnected chain starting from energy markets; rising oil leads to increased inflationary pressures, pushing central banks to maintain high interest rates, thereby reducing market liquidity and limiting gold's attractiveness.

The "Marsad al-Dhahab" report indicated that escalating inflation concerns remain the most influential factor on gold market movements in the short term. It explained that markets were anticipating a sharp wave of inflationary pressures in light of the repercussions of the U.S.-Israeli-Iranian war, which caused widespread disruptions in supply chains and contributed to rising energy and gas prices.

The U.S. Bureau of Labor Statistics announced that the Consumer Price Index (CPI) rose by 0.9% in March, compared to 0.3% in February, but it came in lower than expectations of 1%, while annual inflation stabilized at 3.3%, in line with estimates. The report pointed to continued pressure on fuel prices due to supply chain disruptions related to geopolitical tensions, without inflation becoming broadly entrenched in the economy. Core inflation (excluding food and energy) also rose by 0.2% monthly and 2.6% annually, compared to 2.5% in February, reflecting a slight increase in underlying price pressures.

San Francisco Fed President Mary Daly downplayed the CPI surprise, saying it was expected and pointing to the ceasefire as the main factor. She added that current monetary policy is sufficient to curb inflation while maintaining employment. Ole Hansen, head of commodity strategy at Saxo Bank, said he remains cautious toward gold despite improved prices and higher demand for ETFs, explaining that markets need more certainty regarding the end of the war in the Middle East. He added that any stability could boost gold's upward trend, especially if it later pushes the Fed to cut interest rates.

Analysts believe gold will regain its safe-haven appeal once inflation fears begin to negatively impact economic growth. However, at the current stage, geopolitical risks are concentrated in an inflationary shock that pushes investors to raise their interest rate expectations or at least reduce bets on cuts. As these pressures persist, the inflation shock is likely to gradually turn into a growth shock, eventually leading to a decline in yields.

Despite expectations that the Federal Reserve will keep its policy unchanged until at least the end of summer, some analysts do not rule out starting interest rate cuts during the second half of the year. They also suggested the Fed will adopt a cautious approach, as the U.S. economy has not yet absorbed the full repercussions of the Middle East conflict, keeping the possibility of two 25-basis-point rate cuts during the second half of 2026 to support inflation stability.

Analysts pointed out that gold prices are poised to rise again once markets are convinced that the Federal Reserve will prioritize supporting economic growth over curbing inflation. Next week, U.S. markets await housing data, the Producer Price Index (PPI), jobs data, and an upcoming speech from the Federal Reserve, while traders monitor the development of U.S.-Iranian talks in Pakistan and the reopening of the Strait of Hormuz.

Analysts at several institutions believe that strong demand from central banks, continued geopolitical uncertainty, expectations of rate cuts, and investment diversification away from the dollar are all supportive factors for gold's long-term path. Research firms, including ANZ, expect gold to resume its upward path in the medium term as growth and inflation deteriorate, which may open the door for a return to easing policies, with prices likely to reach $5,800 per ounce by year-end, supported by central bank purchases that could reach about 850 tons in 2026.

Strategists at J.P. Morgan Asset Management also see that gold is no longer treated only as a safe haven, but as an investment asset within portfolios aimed at enhancing returns, with its traditional correlation to geopolitical crises declining, despite continued support from structural factors like central bank purchases and reduced dependence on the dollar, keeping it within a strategic long-term upward path.