The price of an ounce of global gold returned to its rise during today’s session, Friday, after the decline it recorded yesterday due to US inflation data that may affect the Federal Reserve’s decision during the next week, so the fluctuation in gold’s performance continues on its way to recording a weekly decline. The spot gold price rose today by 0.3% to reach the highest level at $2170 per ounce. It opened today’s session at $2162 per ounce and is currently trading at $2168 per ounce.
Yesterday, gold fell by 0.6% and recorded the lowest level at $2,152 per ounce before bouncing up and closing at the level of $2,162. Gold is heading to record a weekly decline of 0.5% so far, which is the first weekly decline after three consecutive weeks of gains, according to Gold Billion analysis. .
Gold’s decline yesterday came after the Producer Price Index data showed an increase in inflation from the perspective of companies and manufacturers during the month of February by 0.6% from 0.3%, which reduced the chances of gold recording a further rise and failing to exceed the level of $2180 per ounce. This week both US consumer and producer prices rose more than expected in February, and consumer spending showed some stability.
Higher inflation adds pressure on the Fed to keep interest rates high, affecting non-yielding assets such as gold, increasing the attractiveness of bonds and lifting the dollar. The dollar rose to its highest level in more than a week following strong inflation readings this week, while traders also braced for the upcoming Federal Reserve meeting. On the other hand, the yield on 10-year US government bonds rose this week by 5%, reaching a two-week high of 4.3%.
The rise in the dollar and government bond yields has a direct negative impact on gold, as it raises the opportunity cost of gold since gold does not provide a return to its holders. On the other hand, traders reduced the chances of an interest rate cut at the Federal Reserve meeting in June to 61%, from about 75% last Friday, and the market expects about three interest rate cuts during 2024 after its previous expectations were between three and four. Sale last Friday.
Volatility may continue to dominate gold movements until the end of the week in light of the markets’ desire not to start a new trend for gold before the Federal Reserve meeting next week, especially in light of the lack of statements coming from Fed members until the meeting date.
It is worth noting that the next meeting of the Federal Reserve will witness the issuance of the bank members’ expectations regarding the future of interest rates. Their last expectations at the December meeting indicated that interest rates would be reduced three times in 2024, but after the latest inflation data this week, there are expectations that members will reduce their interest expectations to only two reductions this year. General.
Global gold prices are currently trading in a horizontal range between the levels of 2180 – 2150 dollars per ounce, and the weekly closing above or below these levels will push the price in the direction of a significant breakout. JPMorgan expects the price of an ounce of gold to rise to $2,500 per ounce in 2024. The bank indicates that, in light of expectations that the Federal Reserve will shift towards a flexible monetary policy, this will stimulate investment in gold compared to high-yielding assets such as bonds.
Gold prices in Egypt: Local gold prices continued to decline during yesterday’s trading in light of the stability of local conditions and the gradual decline in the dollar exchange rate in official banks, which reduced gold pricing, especially in light of the current decline in demand for gold.
The most common 21 karat gold opened trading today, Friday, at the level of 2940 pounds per gram, to trade at the level of 2955 pounds per gram at the time of writing the technical report for Gold Billion, after the price of gold fell yesterday by 50 pounds, closing yesterday’s session at 2940 pounds per gram after the session opened at 2990 pounds per gram.
The recent period witnessed stability in the exchange rate and a gradual decline in the price of the dollar in banks in light of the disappearance of the parallel market, which provided a great calm in gold transactions despite the continued hedging in pricing, but with a weak difference. Gold has witnessed a decline in demand since the beginning of the month of Ramadan, with the expectation that seasonal demand will return to an increase during the second half of the month in conjunction with the holiday period.
On the other hand, many dollar financings were announced heading to Egypt, whether the International Monetary Fund loan, which amounted to $8 billion, or European Union financing worth another $8 billion, to be added to the financing the government obtained from the investment deal in Ras al-Hikma. The Prime Minister indicated that the demand for the dollar began to decline, according to the Central Bank, after the banks made it possible to release goods from customs amounting to $3 billion during the past days.
The Prime Minister also explained that the volume of dollar flows from workers abroad or the surrender of dollars in banks and exchange offices is increasing, and the government is working on developing a plan to repay the obligations of trading partners. These factors helped restore confidence to the markets, bringing confidence to the gold markets, which may prompt it to move according to supply and demand, which contributed to its decline in recent days.
Global and local gold price forecasts The price of an ounce of global gold rose during trading today, Friday, but volatility continues to dominate gold’s movements since the beginning of the week, with the price recording a weekly decline, the first after 3 weeks of rise.