Gold prices have increased in Egypt due to the rising demand for gold as a haven amid the geopolitical turmoil in the Middle East region, and the growing expectations of a devaluation of the Egyptian pound. The global gold price has also surged significantly, according to a report by Gold Bullion. The 21-karat gold traded at EGP 2,210 per gram before reaching its highest level at EGP 2,215 per gram, then it dropped to EGP 2,210 per gram on Monday. This came after it rose by EGP 10 during Sunday's trading, closing at EGP 2,190 per gram. The demand for gold has spiked considerably due to the anticipation of a new currency devaluation against the dollar following a series of negative events last week, the most important of which was the downgrade of Egypt's credit rating by Moody's. Moreover, the demand for gold as a haven increased in the global market, causing the price of an ounce to rise due to the escalation of the conflict between Hamas and Israel, which heightened geopolitical concerns and boosted the demand for gold. HSBC Bank issued a report in which it projected that the Egyptian pound would decline by 25% against the dollar to approach the parallel market exchange rate and that this would coincide with new interest rate hikes by the Central Bank of Egypt to support the foreign exchange and contain inflation rates. The bank also predicted that inflation would rise to 40% before the end of this year, after inflation reached a new record level last August at 37.4%, according to data from the Central Agency for Public Mobilization and Statistics. HSBC's projections came after Moody's credit rating agency lowered the rating of the Egyptian government's long-term debt issues in foreign and local currencies by one notch to Caa1 from B3 while keeping its outlook stable. As for Kristalina Georgieva, the Managing Director of the International Monetary Fund, she stated that Egypt would exhaust its foreign currency reserves if it continued to postpone the decision to devalue the local currency. She also praised the measures taken by the state to correct its financial and economic situation. Regarding global and local gold price forecasts, gold is currently attempting to break through the secondary resistance level at $1850 per ounce, and if it succeeds in doing so, it will target $1880 per ounce, which is the next short-term goal for gold. As for the local price, the momentum of buying operations has increased again, pushing the price to surpass EGP 2,200 per gram of 21-karat, and it is now aiming to reach EGP 2,225 per gram. If it manages to breach this level, it will target recording EGP 2,250 per gram.
