Gold prices in the Egyptian market increased by EGP 95 over the week from 10 to 17 October, with the price of 21-carat gold, the most widely traded grade, reaching EGP 6,250 per gram on Friday, compared with EGP 6,155 last Saturday, according to data released by gold and jewellery trading platform iSagha.
According to the platform, the local performance of gold diverged somewhat from global price movements, with the international price falling from $4,172.10 per ounce last Saturday to $4,165.85 on Friday. It noted that the rise in the US dollar against the Egyptian pound provided significant support for gold in the Egyptian market, helping offset the impact of the decline in global prices.
Moreover, gold had come under pressure in international markets amid accelerating US inflation, which brought the possibility of tighter monetary policy back into focus. Expectations subsequently shifted towards the Federal Reserve holding interest rates steady at its meeting scheduled for 27 and 28 October.
According to iSagha, elevated inflation data increased market bets on a possible US interest rate hike at the October meeting. However, comments from Federal Reserve officials subsequently helped temper these expectations. Market estimates indicated that the probability of interest rates remaining unchanged at the meeting had risen to more than 80%, following a marked shift in investor expectations after the inflation data was released.
iSagha noted that this development was significant for gold, stressing that markets respond not only to current inflation levels but also to what they may signal about the future trajectory of interest rates.
The platform explained that if interest rate expectations stabilise or the likelihood of monetary tightening diminishes, gold could receive further support, particularly if accompanied by a weaker dollar. Conversely, if inflation data continues to exceed expectations, renewed pressure could weigh on the precious metal.
Furthermore, the platform reported that the US dollar had risen from EGP 52.37 to EGP 53.45, an increase of EGP 1.08. It explained that a stronger dollar against the Egyptian pound typically increases gold’s implied value in local currency when the international price per ounce is converted into Egyptian pounds.