Gold prices surged in local markets on Saturday, coinciding with the weekend closure of global stock exchanges. This follows an eighth consecutive week of gains, with gold rising by 1.8% amid heightened global uncertainty and strong Central Bank of Egypt’s (CBE) purchases, according to the iSagha platform.
Saeed Embaby, CEO of iSagha for online gold and jewelry trading, reported that local gold prices increased by approximately EGP 5 on Saturday compared to Friday’s closing rates. The price of 21k gold reached EGP 4,145 per gram, while the global ounce price climbed 1.8% ($53) during the week ending Friday evening, peaking at an all-time high of $2,955 on February 20.
Embaby added that 24k gold was priced at EGP 4,737 per gram, 18k gold at EGP 3,553 per gram, and 14k gold at EGP 2,764 per gram. The price of a gold coin stood at EGP 33,160. He highlighted that this marks the longest weekly gold rally since mid-2000, when prices first surpassed $2,000 per ounce. He attributed the surge to geopolitical and economic instability driven by U.S. policies, prompting investors to turn to gold as a safe-haven asset.
Last Friday saw a slight price dip due to profit-taking after the strong gains recorded earlier in the week. This decline was influenced by former US President Donald Trump’s proposal to ease sanctions on Russia as part of a potential deal to end the Russia-Ukraine war. Despite this, ongoing market uncertainty is expected to push gold prices to new record highs in the near future, subsequently affecting local markets.
The broader financial landscape remains volatile, with Trump’s trade policies adding to global economic concerns. In addition to imposing a 25% tariff on cars, pharmaceuticals, and microchips, he has expanded tariffs on lumber and other soft commodities. These policies have fueled investor anxiety, further driving demand for gold as a hedge.
Economic concerns are also reflected in the University of Michigan’s Consumer Sentiment Index for February, which indicated a decline in US consumer confidence amid fears of rising costs due to tariffs.
Meanwhile, the World Gold Council reported a 54% year-on-year increase in central bank gold purchases, reaching 333 tons following Trump’s victory. Countries including China, Russia, and India have ramped up their gold reserves as part of a broader shift away from the U.S. dollar. Some analysts speculate that China may be preparing to introduce a gold-backed currency, potentially challenging the dollar’s global dominance.
The surge in gold prices has had a mixed impact on global demand. In India, record-high prices have dampened jewelry purchases, with gold imports hitting a six-month low in January. However, investment demand has surged, with gold exchange-traded funds (ETFs) seeing unprecedented inflows, according to Kavita Chacko, Head of Research in India at the World Gold Council.
In contrast, China’s gold market strengthened in January, as the central bank increased bullion purchases for the third consecutive month. This trend is expected to continue, driven by rising gold consumption, according to Ray Jia, Head of Research in China at the World Gold Council. With ongoing economic and geopolitical uncertainty, analysts anticipate that gold prices will remain on an upward trajectory, reinforcing its status as a key safe-haven asset in global markets.
