Gold Continues Global Rally Amid Inflation Anxiety and Trade Uncertainty
Waleed Farouk
Gold prices declined in the local Egyptian market during Wednesday's trading, despite gains in global spot prices, which were supported by growing investor caution ahead of the release of key U.S. inflation data and persistent uncertainty surrounding the global trade outlook—particularly the future of U.S.-China relations.
In Egypt, gold prices fell by EGP 5 compared to Tuesday's closing levels. The 21-karat gram opened at EGP 4665 and ended at EGP 4660. Meanwhile, global spot gold rose by $10 to reach $3,334 per ounce.
Other local gold prices included:
24-karat gold at EGP 5,326 per gram
18-karat gold at EGP 3,994 per gram
14-karat gold at EGP 3,107 per gram
The gold pound at EGP 37,280
On Tuesday, local gold prices also saw a decline of EGP 5, with the 21-karat gram dropping from EGP 4670 to EGP 4665 by the close. Globally, spot gold slipped by $3 that day, ending at $3,324 per ounce.
The contradiction between global and local price movements is attributed to a drop in the exchange rate of the U.S. dollar against the Egyptian pound, which hovered around EGP 49.70. Additionally, domestic demand remained relatively subdued.
The pound's strength is being supported by increased foreign currency inflows and a significant rise in remittances from Egyptians working abroad. This, combined with the U.S. dollar's broader weakness against other global currencies, is contributing to local market dynamics.
Globally, the rise in gold prices is being driven by investor anticipation surrounding the release of the U.S. Consumer Price Index (CPI) later today. This data is expected to provide crucial guidance on the Federal Reserve's upcoming monetary policy decisions.
Expectations point to continued price pressures, which may compel the Federal Reserve to maintain higher interest rates for an extended period. Such a scenario enhances gold's appeal as a hedge against inflation.
On the geopolitical front, doubts continue to cloud the outlook of a potential trade agreement between Washington and Beijing. Despite recent positive signals, investors await official confirmation from the two nations' leaders, which is heightening market volatility and driving demand for safe-haven assets, led by gold.
In this context, analysts at ANZ Research project that gold prices could climb toward $3,600 per ounce in the second half of the year. This forecast is underpinned by strong central bank purchases and growing investor interest in hedging against both political and economic risks.
Although gold traditionally moves inversely with real yields, this correlation has weakened since early 2022. Increasingly, gold is being seen as a shield against geopolitical shocks—particularly in light of economic sanctions targeting key emerging-market economies.
In summary, gold's current performance reflects a cautious equilibrium between risk aversion and moderate optimism about achieving relative economic stability in H2 2025. This trend is expected to persist until there is greater clarity regarding U.S. monetary policy and the direction of trade negotiations between the world's two largest economies.
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