Gold prices surge 5.9% since early March amid market uncertainty
Global gold prices continued their upward trajectory last week, marking a third consecutive weekly gain despite a pullback in the final two trading sessions after reaching an all-time high.
Over the past week, gold prices rose by 1.3%, peaking at a record $3,057 per ounce. The week began at $2,988 per ounce and closed at $3,023 per ounce, according to Gold Bullion. The metal is on track for a third straight monthly gain, up 5.9% since early March. Since the start of 2025, gold has surged 15.2%, setting 16 record highs, four of which surpassed the $3,000 per ounce milestone.
Federal Reserve Policy and Gold Market Trends
The US Federal Reserve maintained interest rates at 4.25%-4.50% during its second meeting of the year last Wednesday, in line with expectations. Fed projections indicate two quarter-point rate cuts by the end of 2025, reflecting ongoing uncertainty over trade policies, labor market resilience, and persistent inflation. This has reduced the urgency for immediate monetary policy adjustments.
Despite gold's record-setting momentum, profit-taking and a strengthening U.S. dollar led to declines in the last two trading sessions of the week. The inverse relationship between gold and the dollar exerted additional downward pressure on the metal.
Geopolitical Risks Fuel Demand
Market analysts note that while investors are taking profits, gold remains in demand as a safe-haven asset amid geopolitical tensions. Continued airstrikes by Israel on Gaza have confirmed the collapse of a two-month ceasefire, escalating risks and driving further demand for gold.
The World Gold Council (WGC) suggested that gold may stabilize in the short term due to its rapid recent gains. However, ongoing geopolitical uncertainty, inflationary pressures, expectations of lower interest rates, and a weaker U.S. dollar continue to support investment demand. If gold remains above $3,000 per ounce for the next two weeks, the council predicts increased buying activity.
Gold Price Forecasts and ETF Inflows
ANZ Bank has raised its gold price forecast to $3,100 per ounce for the next three months and $3,200 per ounce over six months, citing heightened geopolitical risks, easing monetary policies, and central bank purchases.
Meanwhile, WGC reported a sustained influx into gold-backed exchange-traded funds (ETFs) for the seventh consecutive week. Inflows totaled 32.7 tonnes of gold for the week ending March 14, underscoring continued investor confidence in the metal.
Local Gold Market Trends
Local gold prices in Egypt also saw gains last week, reaching new record highs. On Saturday, 21K gold opened at EGP 4,285 per gram and traded at EGP 4,280 per gram after a slight EGP 10 drop on Friday. Over the week, gold rose 1.9%, hitting a peak of EGP 4,305 before closing at EGP 4,280 per gram.
The sharp increase in global gold prices was the primary driver of local gold market trends. The relative stability of the U.S. dollar against the Egyptian pound had a neutral effect on local pricing. Supply and demand dynamics played a lesser role in price movements, as high prices deterred buying interest.
Profit-taking led to a temporary decline in gold prices on Friday, as investors consolidated gains before attempting a breakout above EGP 4,300 per gram.
Economic Outlook and Market Stability
Market stability in Egypt has improved following the successful completion of the International Monetary Fund's (IMF) fourth review and the approval of a new loan tranche. Additionally, expectations are rising that the Central Bank of Egypt may begin cutting interest rates following a decline in inflation.
As global economic conditions evolve, gold's role as a hedge against uncertainty remains strong, with investors closely watching central bank policies, geopolitical developments, and inflation trends.
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