Egyptian gold prices have been rising daily due to the stability of the global gold price near $2000 per ounce and the depreciation of the Egyptian pound in the parallel market, according to Gold Bullion.
The popular 21-karat gold started trading on Monday at EGP 2,465 per gram and then increased by EGP 5 to reach EGP 2,470 per gram, while the gold pound was valued at EGP 19,720.
Gold Bullion attributed the local gold price hikes to the anticipation of more escalation in the Middle East region and the fear of a new devaluation or flotation of the Egyptian pound shortly.
The Israeli-Palestinian conflict, which started on 7 October, has pushed up the gold price by EGP 275 per gram, a 12.7% increase, as gold became a haven for investors in both global and local markets.
Another factor that affected the gold price was the downgrade of Egypt’s long-term sovereign credit rating by Standard & Poor’s from B to B- with a stable outlook on Friday.
Meanwhile, gold prices dropped from their five-month high at the beginning of this week, ahead of some important data releases this week, while the markets are still watching the developments of the conflict in the Middle East, which caused a strong surge in gold prices in the past two weeks.
Spot gold prices are trading at $1,979 per ounce, after hitting a low of $1,964 per ounce on Monday. This comes after gold reached its highest level in five months at $1,997 per ounce on Friday.
Since the start of the Israeli-Palestinian conflict, gold has risen by 8% to gain $148 per ounce, supported by the demand for a haven amid the current tensions in the Middle East and the fear of further escalation and involvement of new parties.
On the other hand, this week will see the release of some important data about the US economy, such as the preliminary reading of the GDP for the third quarter. A positive reading that exceeds expectations may have a negative impact on gold, as the growth of the US economy is the main reason behind the rise of bond yields to their highest levels in 16 years.
