Gold prices declined on Friday, yet the precious metal achieved gains over the past week due to safe-haven inflows and a US jobs report revealing lower-than-expected job growth in February. This suggests that the Federal Reserve may be on track to cut interest rates this year.
The global ounce price of gold rose by 1.8% last week, closing at $2,909 per ounce after opening the week at $2,873 per ounce and reaching a weekly high of $2,930 per ounce, according to Gold Bullion. Despite trading mostly below the $2,930 per ounce resistance level, gold lacked the necessary bullish momentum to break through and target the recent all-time high of $2,956 per ounce.
The US government jobs report showed that the American economy added 151,000 jobs in February, compared to market expectations of 160,000 jobs, with the unemployment rate standing at 4.1%, slightly higher than the expected 4%. The weaker-than-expected US jobs data supported gold, along with a decline in the US dollar index to a four-month low, marking its biggest weekly drop since November 2022.
Additionally, ongoing uncertainty regarding President Biden’s tariff policies has increased demand for gold as a safe haven and hedge against potential inflation from these trade measures. Federal Reserve Chair Jerome Powell stated that the Fed can wait to assess the impact of President Trump’s policies before adjusting interest rates. He highlighted significant policy changes in trade, immigration, and regulation, emphasizing their overall effect on economic and monetary policy. Despite high uncertainty, Powell stressed a cautious approach, focusing on real signals over market noise, contrasting with rising market expectations for rate cuts this year.
China increased its gold reserves to 73.61 million ounces in February, up from 73.45 million ounces in January, marking the fourth consecutive month of purchases by the Chinese central bank. According to data released on Friday, China’s gold reserves reached $208.64bn in February, up from $206.53bn in January. Meanwhile, global gold-backed investment funds recorded net inflows of 26.6 tonnes in the week ending February 28, marking the fifth consecutive week of inflows into these funds.
Local Gold Prices
Domestic gold prices rose last week, supported by gains in global gold prices and the gradual increase in the U.S. dollar exchange rate against the Egyptian pound, leading to a positive weekly close. On Saturday, 21k gold, the most commonly traded in Egypt, opened at EGP 4,125 per gram and was trading at EGP 4,120 per gram at the time of writing. The price dropped by EGP 10 on Friday, closing at EGP 4,120 per gram after opening at EGP 4,130 per gram.
Forecasts
Global gold prices increased last week, supported by the decline in the U.S. dollar and weaker-than-expected U.S. jobs data, along with continued demand for gold as a safe-haven asset amid ongoing U.S. trade policies. Local gold prices also increased during the past week, benefiting from rising global gold prices and the gradual appreciation of the U.S. dollar against the Egyptian pound, which contributed to higher gold pricing.
Global gold closed the week below the $2,930 per ounce level, acting as a resistance point. This suggests weak bullish momentum, but as long as prices remain above $2,900 per ounce, another upward attempt may occur next week. If this level is breached, gold could rise toward the next resistance zone at $2,950–$2,960 per ounce.
