Gold Prices Steady Locally and Globally Amid Fed Rate Cut Uncertainty and Washington Tensions
Waleed Farouk
Gold prices in the local market remained stable during Thursday's trading session, coinciding with a slight uptick in global spot prices. The stability comes as the U.S. dollar index and Treasury yields weakened, amid growing divergence between Federal Reserve Chair Jerome Powell and former President Donald Trump over the timing of interest rate cuts.
According to data from the 'iSagha' gold trading platform, the price of 21-karat gold held steady at EGP 4,705 per gram, while the global spot price of gold rose by just $1, reaching $3,332 per ounce.
Other domestic price levels included:
24-karat gold: EGP 5,377 per gram
18-karat gold: EGP 4,033 per gram
14-karat gold: EGP 3,137 per gram
Gold sovereign: EGP 37,640
Gold had seen a minor increase of EGP 5 on Wednesday, with the 21-karat gram starting at EGP 4,700 and closing at EGP 4,705. Globally, gold gained $14 during that session, rising from $3,317 to $3,331 per ounce.
Despite investor interest shifting towards equities, gold prices have remained relatively steady both locally and internationally. This is largely attributed to weakening confidence in the U.S. dollar, driven by mixed and often conflicting signals from U.S. monetary policy.
Markets are currently focused on when and how quickly the Federal Reserve may begin cutting interest rates, bringing economic data back into the spotlight as a major influence on monetary policy decisions.
On Wednesday, Fed Chair Jerome Powell concluded his semi-annual testimony before Congress, where he was grilled over the central bank's monetary policy report. While several global central banks have already begun easing rates in response to cooling inflation, the Federal Reserve has maintained its benchmark interest rate in the range of 4.25%–4.50% throughout this year.
With inflation now approaching the Fed's 2% target, debate has intensified over the timing of the next rate cut. Recent U.S. economic data, including the Consumer Confidence Index released on Tuesday and New Home Sales data released on Wednesday, point to increasing economic strain. However, Powell remains concerned about the inflationary risks of tariffs, which he believes may take time to fully materialize.
Durable Goods Orders Jump More Than Expected
On Thursday, the U.S. Census Bureau reported that durable goods orders rose by 16.4% in May, equivalent to $48.3 billion, bringing the total to $343.6 billion. This followed a revised 6.6% decline in April, and far exceeded market expectations of an 8.5% increase.
The report added:
'Excluding transportation, new orders rose 0.5%. Excluding defense, orders rose 15.5%.'
The increase was led by transportation equipment, which rose for the fifth time in six months, surging by 48.3% to $145.4 billion.
The U.S. Department of Labor also reported a drop in initial jobless claims, which fell to 236,000 for the week ending June 21, down from a revised 246,000 the previous week.
However, continuing claims rose by 37,000, reaching 1.974 million for the week ending June 14. The insured unemployment rate remained unchanged at 1.3%, and the four-week moving average dropped by 750 to 245,000.
Trump vs. Powell
Former President Donald Trump addressed the media Wednesday at the NATO Summit, touching on several issues, including the state of the U.S. economy.
He once again criticized Fed Chair Powell for being 'too slow to cut interest rates,' stating:
'Fortunately, he'll be gone. I think he's been very bad.'
Geopolitical Calm Reduces Demand for Safe-Haven Assets
Geopolitical risk has also subsided for now, as the ceasefire between Israel and Iran continues for a third consecutive day. While the situation remains fragile, the absence of further escalation has led to weaker safe-haven demand for gold and precious metals.
Consequently, market attention has shifted back to macroeconomic indicators and monetary policy, which are likely to drive the next phase of movement in gold prices.
A key data point to watch is Friday's release of the U.S. Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred inflation gauge.
Any soft reading could revive expectations of near-term rate cuts — and give gold a strong bullish impulse.
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