Egypt's gold market witnessed significant losses during the week ending on Saturday, with prices declining by 2.3%. The 21-carat gold gram lost 145 EGP, dropping from 6380 EGP to 6235 EGP. This decline was influenced by a global decrease in gold prices and an increase in US Treasury yields, as investors awaited the US Federal Reserve's interest rate decisions.
According to the "Gold Observatory for Economic Studies," the 21-carat gold gram opened the week at 6380 EGP and closed at 6235 EGP. Meanwhile, the global gold ounce price fell by 93 USD, from 4378 USD to 4285 USD during the same period. The price of 24-carat gold reached 7126 EGP, and 18-carat gold was at 5344 EGP, with the gold pound priced at 49880 EGP.
Dr. Walid Farouk, director of the "Gold Observatory for Economic Studies," stated that the local gold price movement was affected by two factors: the global decline in gold prices and the decrease in the US dollar exchange rate against the Egyptian pound. When the global gold price and the dollar exchange rate decrease simultaneously, the impact on the local gold gram price is more significant than what the ounce price alone might suggest.
The US dollar exchange rate against the Egyptian pound decreased from 52.28 EGP to 51.91 EGP, a decline of approximately 0.7%. This drop did not support local gold prices and instead contributed to their decline. According to the "Gold Observatory," the price discount on 21-carat gold gram decreased from around 60 EGP at the beginning of the week to about 23 EGP by the end of the week.
The calculations of the "Gold Observatory" indicate that the indicative value of the 21-carat gold gram at the beginning of the week was around 6439 EGP, based on a global gold ounce price of 4378 USD and a dollar exchange rate of 52.28 EGP. By the end of the week, this value decreased to approximately 6258 EGP, based on a global gold ounce price of 4285 USD and a dollar exchange rate of 51.91 EGP.
Despite the decline, the local gold price remains higher than its level at the beginning of the year, with a gain of around 405 EGP or 7%. However, it is still lower than its peak of 7600 EGP recorded on March 2, by approximately 1365 EGP or 18%. The current price drop may be attributed to the wait for the US Federal Reserve's interest rate decisions and their potential impact on the global gold market.
The decline in gold prices in Egypt is also influenced by the decrease in global gold prices and the fluctuations in the US dollar exchange rate. As investors await the US Federal Reserve's decisions, they may adjust their expectations and investment strategies, which could impact gold prices in the local market. The "Gold Observatory" continues to monitor these developments to provide insights into the Egyptian gold market.
Key points
- Egypt's gold prices dropped 2.3% this week, with 21-carat gold losing 145 EGP.
- The decline was influenced by a global decrease in gold prices and an increase in US Treasury yields.
- Despite the decline, the local gold price remains higher than its level at the beginning of the year, with a gain of around 405 EGP or 7%.
