Egypt's gold market witnessed a substantial decline in prices at the start of Monday's trading, with the price of 21-carat gold, the most traded in the Egyptian market, opening at 6,100 pounds per gram before settling at around 6,090 pounds per gram. This represents a loss of 130 pounds per gram from the previous day's close of 6,230 pounds per gram. According to an analysis by Gold Billion, a prominent market research firm, the decline is attributed to the sharp drop in global gold prices at the beginning of the trading week.
The current market price of gold in Egypt is trading at a discount of 37 pounds per gram, with an increase in supply. This discount, coupled with the decline in global gold prices, has led to a surge in selling pressure, pushing the price to break the 6,100-pound level. Gold prices in Egypt have decreased by 2.3% over the past week, primarily due to the continued influence of global market trends on the local market.
The analysis also notes that the Egyptian pound's exchange rate against the US dollar has stabilized near 52 pounds, with limited impact on local gold prices. The decline in global gold prices has been the primary driver of the price drop in Egypt, as the market continues to adjust to changing global conditions. Furthermore, the increase in gold supply and reduced local demand have contributed to the current market dynamics.
On the global front, gold prices have dropped by 3.2% during Monday's trading, reaching a seven-week low of 4,142 dollars per ounce. The decline has been attributed to the breaking of the 4,250-dollar support level, with market analysts targeting the 4,000-dollar level as the next major support. This global trend has significantly influenced gold prices in Egypt, contributing to the substantial decline.
The decline in gold prices comes amid an increase in crude oil prices, nearing 105 dollars per barrel, and stable US government bond yields. These factors have added pressure on gold, particularly with growing market expectations of a potential US interest rate hike in October, with probabilities reaching 70%, according to market analysis.
The current market situation has led to an increase in gold exports by Egyptian companies, taking advantage of the price gap. As the market continues to adjust to changing global and local conditions, investors and consumers are closely monitoring the situation for potential opportunities or risks.
Key factors influencing the gold market include the global price decline, limited fluctuations in the dollar-to-pound exchange rate, and increased gold supply in Egypt. These factors have collectively contributed to the substantial drop in gold prices in Egypt, with potential implications for the local market and investors.
Key points
- Egypt's gold prices have dropped by over 130 pounds per gram, influenced by a sharp decline in global gold prices.
- The current market price of gold in Egypt is trading at a discount of 37 pounds per gram, with an increase in supply.
- Global gold prices have dropped by 3.2% during Monday's trading, reaching a seven-week low of 4,142 dollars per ounce.
