Gold Gains EGP 85 as Fed Rate Cut Expectations Drive Rally

Gold prices in local Egyptian markets rose on Monday, supported by a global increase in gold ounce prices, a weaker US dollar, and growing expectations of a Federal Reserve interest rate cut.

Gold prices in Egypt climbed by EGP 85 during today’s trading compared to the closing levels on Saturday. The price of 21-karat gold reached EGP 4,685 per gram, while the global gold ounce price rose by $64 to reach $3,364.

In detail:

24-karat gold: EGP 5,354 per gram

18-karat gold: EGP 4,016 per gram

14-karat gold: EGP 3,124 per gram

Gold sovereign (8 grams of 21K): EGP 37,480

Last month, gold prices in local markets declined by EGP 130. The 21-karat gram opened May at EGP 4,730 and ended the month at EGP 4,600. Meanwhile, the global gold ounce fell by $10—from $3,300 to $3,290.

The recent surge in gold prices is largely attributed to a weakening US dollar and increased market anticipation of a shift in the Federal Reserve's monetary policy.

The dollar's decline followed the release of the April Personal Consumption Expenditures (PCE) Price Index, which showed that annual inflation slowed to 2.1%—its lowest since early 2021—while core inflation eased to 2.5% from 2.7% in March.

These inflation readings have strengthened market expectations that the Federal Reserve could initiate a rate-cutting cycle as early as September, with a possible second cut in December.

Supporting this view, Fed Governor Christopher Waller recently stated that rate cuts remain a possibility despite ongoing inflation risks. His remarks further boosted gold's momentum amid continued dollar weakness.

Markets are now closely watching a series of statements expected this week from members of the Federal Open Market Committee (FOMC), including a highly anticipated speech by Fed Chair Jerome Powell, which may offer clearer signals on the direction of US monetary policy and its implications for the dollar and gold prices.

Multiple factors continue to support the bullish outlook for gold, including a weak dollar, cooling inflation, and rising geopolitical tensions in Eastern Europe and Asia. Growing global uncertainty is also enhancing the appeal of gold and other precious metals as safe-haven investments.

Additionally, investors are awaiting a slate of key economic data in the coming days, including Monday’s ISM Manufacturing PMI, Tuesday’s job openings data, the monthly jobs report, the European Central Bank’s meeting, weekly US jobless claims on Thursday, and the Non-Farm Payrolls report on Friday—all of which may significantly influence Fed policy decisions.