Gold prices in Egypt declined today, with 21-karat gold defying global expectations

Egyptian gold markets witnessed a notable shift today, contrary to global expectations, with gold prices in Egypt declining significantly despite slight increases in the price of an ounce of gold on international exchanges. This divergence comes at a time when investors are turning to the precious metal as a safe haven amid escalating geopolitical tensions in the Middle East.

Gold prices today in Egypt

According to data issued by the "iSaghah" online gold and jewelry trading platform, prices recorded a decline in various carats, and the prices were as follows:

• 21-karat gold: It declined by about 25 pounds to record 7,225 pounds per gram, which is the most traded and sold karat in the Egyptian market.
• 24-karat gold: The price per gram was recorded at approximately 8,257 Egyptian pounds .
• 18 karat: The price per gram reached approximately 6,193 Egyptian pounds .
• The gold pound: its price approached the level of 57.8 thousand pounds .

Globally, the price of gold in spot transactions reached $5,099.48 per ounce , supported by investor concerns about the widening scope of the regional conflict.

Reasons for the local decline: liquidity crisis

The report by "iSagha" attributed this local decline, despite the global rise, to weakness of available cash liquidity in Egyptian markets. Liquidity is the main driver of supply and demand; the shortage of cash among merchants and citizens leads to a decrease in purchasing power, forcing merchants to lower prices to stimulate sales and revitalize the market, even if global indicators point to an increase.

Gold as a safe haven amid geopolitical tensions

Historically, gold has been considered the primary store of value during times of crisis and war. With the war in the Middle East entering its sixth day with no end in sight, global demand for safe-haven assets surged. This investment behavior is a natural and well-known reaction in financial markets, where capital flees risky assets (such as stocks) to stable assets (such as gold and bonds) when major conflicts erupt. This explains the global surge that saw gold prices approach $5,200 per ounce before paring back slightly.

The impact of the US Federal Reserve and energy prices

From another economic perspective, international monetary policies play a crucial role in determining gold's trajectory. Renewed concerns about inflation, stemming from rising global oil and gas prices, have altered traders' calculations regarding interest rates. These indicators have led investors to postpone their expectations of an imminent interest rate cut by the US Federal Reserve.

It is well known economically that there is often an inverse relationship between the dollar and gold; keeping interest rates high strengthens the dollar, which makes gold (which does not generate a periodic return) less attractive to foreign investors, and this has limited the large gains that gold could have achieved globally as a result of political tensions.

Future outlook for the market

Gold remains a strategic savings vehicle for Egyptians, protecting the value of their savings against currency fluctuations and inflation. Despite the current decline due to technical factors related to liquidity, its correlation with the global price and the dollar exchange rate remains the primary determinant of overall price trends in the medium and long term.