The global gold market witnessed a notable surge in prices over the past week, with gold prices climbing by 2.6% to reach $2,378 per ounce—a level not seen in the past two weeks. Analysts attribute this uptick to the enduring appeal of gold, buoyed by expectations of potential interest rate cuts in response to recent labor market data from the United States.
Following a period of depreciation, gold prices stabilized at $2,360 per ounce by the week’s end, marking a significant recovery. Despite this rise, prices remain $71 below last month’s peak of $2,431 per ounce.
Market speculation intensified after an unexpected increase in US unemployment claims, particularly in light of a lackluster April employment report. This sentiment has led to a 61% probability of the US Federal Reserve implementing rate cuts by September, with a further increase to 75% by November.
Recent data from the World Gold Council highlights robust demand, with global central banks acquiring 16 tonnes of gold in March alone, contributing to a record-breaking first quarter. Sovereign wealth funds, including the State Oil Fund of the Republic of Azerbaijan, also play a significant role in gold acquisitions, adding 3 tonnes annually to their reserves.
The Egyptian gold market echoed the global uptrend, albeit with local factors moderating the rise. Despite a slight dip in domestic gold demand and a minor downturn in the US dollar exchange rate, gold prices in Egypt remained relatively stable. On Saturday, the opening trading price for 21k gold stood at EGP 3,135 per gram, maintaining consistency with the previous day’s close, showcasing the nuanced dynamics of local markets amidst global trends.
Photo source: Google
By: Montel Kamau
Serrari Financial Analyst
14th May, 2024
