Gold markets in Egypt and globally witnessed an unprecedented surge today, reaching record highs never before seen in the market. This dramatic rise is driven by widespread investor anxiety, reinforcing the precious metal's status as a safe haven during times of crisis, with the global price of an ounce of gold reaching an all-time high of $4,690.
Price details in the Egyptian market
According to a report by the online gold and jewelry trading platform iSagha, local prices have jumped sharply in response to global fluctuations. Saeed Embaby, the platform's CEO, stated that the Egyptian market saw an increase of approximately 85 Egyptian pounds in today's trading alone. The price of a gram of 21-karat gold, the most traded and sold type in Egypt, reached a new record high of 6,240 Egyptian pounds.
Regarding other karats, Embaby explained that the price of a gram of 24-karat gold, commonly used in bullion for investment, reached approximately 7,132 Egyptian pounds, while a gram of 18-karat gold recorded around 5,349 pounds. As for the gold sovereign, it nearly broke the 50,000 pound barrier, registering around 49,920 pounds, reflecting the high demand and the desire to hedge against inflation.
Geopolitical reasons behind the rise
The primary reason behind this price surge is the growing geopolitical uncertainty on the international stage. Markets reacted strongly to US President Donald Trump's threats to impose punitive tariffs on eight European countries in response to their opposition to his controversial plan to annex Greenland. These political tensions prompted investors to flee risky assets and paper currencies that could be affected by trade wars, and instead seek refuge in gold as a safe haven for their savings.
Gold as a safe haven throughout history
Historically, major price surges in the precious metal have been linked to global political and economic crises. Gold is considered a store of value that is not as directly affected by government decisions as currencies. Under the current scenario, with escalating geopolitical risks, history is repeating itself as major capital and investment funds increase their gold holdings, creating immense buying pressure that drives prices to astronomical levels.
Interest rate expectations and their impact
In addition to political tensions, monetary policy is playing a pivotal role in this surge. Gold reached these record highs in Asian trading, buoyed by expectations of lower US interest rates. It is a well-established economic principle that there is an inverse relationship between gold and interest rates; when interest rates fall, the opportunity cost of holding gold, which does not generate a periodic return, decreases, making it more attractive compared to bonds or bank deposits.
The markets had already seen a rise of 1.9% during trading last week, which paved the way for this new jump, amid expectations of continued volatility and an upward tendency as long as global uncertainty persists.
