Gold prices in Egypt continued their upward trend for the third consecutive week, supported by a strong rally in global gold prices and a rise in the US dollar against the Egyptian pound.
According to a technical analysis by Gold Bullion, the price of 21-karat gold rose 5.8% last week, increasing from EGP 6,250 per gram at the start of trading to EGP 6,630, marking weekly gains of EGP 380.
The rise pushed 21-karat gold to its highest level in 11 weeks. The metal also broke through several key resistance levels, including EGP 6,300 and the psychological EGP 6,500 mark, before closing above EGP 6,600 per gram, strengthening the upward momentum.
The main driver of the local rally was the sharp increase in international gold prices, coupled with a 65-piaster, or 1.3%, rise in the dollar exchange rate against the Egyptian pound during the week.
Despite the gains, Gold Bullion noted that local gold traded at a discount to its fair value during most of the week, reflecting relatively weak domestic demand and increased resale activity.
Consumers have increasingly sought to capitalise on the recent price surge by liquidating part of their gold holdings, boosting supply in the local market relative to demand.
Meanwhile, the Central Bank of Egypt kept its key interest rates unchanged at 19% for deposits and 20% for lending, amid continued inflationary risks and geopolitical tensions.
Urban inflation in Egypt rose to 14.9% in July, up from 14.3% in June.
Internationally, gold prices rose 5.2% during the week, with the price of an ounce climbing from $4,372 to $4,602.
Gold reached a weekly high of $4,632, its highest level since May, adding around $230 per ounce in a single week.
The metal also broke out of its previous $4,300-$4,400 trading range, surpassing the $4,500 and $4,600 levels, signalling stronger technical momentum and reinforcing the broader uptrend.
Investors are closely monitoring the US Federal Reserve’s upcoming decisions, particularly amid persistent inflation risks. Current market expectations put the probability of the Fed keeping interest rates unchanged at its September meeting at 65%, compared with a 35% probability of a rate hike.
Gold Bullion expects the local market’s ability to sustain trading above EGP 6,600 per gram to remain key to maintaining the upward trend.
However, further gains will depend on the continued strength of international gold prices and the stability of domestic demand.
Globally, a sustained close above $4,600 per ounce would strengthen the prospects for further gains, while movements in the US dollar, bond yields and expectations for US interest rates are expected to remain key factors determining gold’s direction in the coming period.
