Gold prices in Egypt continued their upward trajectory last week, rising by 0.8% in local markets, while global gold prices gained about 1%, driven by expectations that the US Federal Reserve will maintain a monetary easing cycle in 2026, according to a report by iSagha. Saied Embaby, CEO of iSagha, said local gold prices increased by roughly EGP 45 over the week. The price of 21-karat gold opened trading at EGP 5,745 per gram, touched EGP 5,800, and closed at EGP 5,790. Meanwhile, global gold rose by approximately $40 per ounce, from $4,299 at the start of the week to $4,339 at the close. Embaby added that 24-karat gold reached EGP 6,617 per gram, 18-karat gold stood at EGP 4,963, and the price of a gold pound climbed to EGP 46,320. Since the beginning of 2025, local gold prices have surged by around EGP 2,050, marking a 55% increase. Globally, gold has risen by about $1,715 per ounce, or 65%, delivering its strongest annual performance since 1979. The gains have been driven by sustained central bank purchases, rising inflationary pressures, and expectations of interest rate cuts. Last week, spot gold prices approached record levels, reaching $4,374 per ounce on Thursday, close to this year's peak of $4,381, despite rising global bond yields. Economic data suggesting weaker US consumer confidence and slightly lower inflation expectations supported gold's momentum. The University of Michigan reported that the US consumer sentiment index fell to 52.9 in December from 53.3, below market expectations of 53.5. Respondents anticipated higher unemployment and continued declines in durable goods purchases, while one-year inflation expectations rose to 4.2% and five-year expectations held steady at 3.2%. Meanwhile, US Treasury yields increased after the Bank of Japan raised its interest rate from 0.50% to 0.75%, pushing the 10-year US Treasury yield up by 2.5 basis points to 4.147%. Despite this typically negative correlation with gold, prices continued to rise, supported by strong demand. John Williams, President of the Federal Reserve Bank of New York, noted that recent data indicate further moderation in inflation and emphasized that there is currently no urgent need to adjust monetary policy. Markets are pricing in cumulative rate cuts of around 60 basis points by the Fed over 2026, with the first expected in June. Traders also assign a roughly 20% probability of a rate cut at the January 28 meeting. Goldman Sachs forecasts that gold could rise by 14% to $4,900 per ounce by December 2026, citing potential upside risks if retail investors continue diversifying their portfolios. The bank highlighted that strong central bank demand and expected US rate cuts are likely to underpin gold prices, reaffirming its recommendation to maintain long-term positions in the precious metal. Markets will closely watch upcoming US economic data, including ADP employment figures, preliminary GDP growth, durable goods orders, and industrial production, which could further influence gold trends in the near term.
