Egyptian Gold Prices Dip Amidst US Inflation Surge; Experts Weigh Rebound Prospects

Gold prices in the Egyptian market experienced a downturn on Tuesday, primarily influenced by US inflation data that surpassed market expectations. The price of a gram of 21-karat gold decreased to approximately LE 6,180, a drop from the previous LE 6,250.

Lotfi al-Moneeb, Vice Chairman of the Gold and Jewelry Division at the Federation of Egyptian Chambers of Commerce (FEDCOC), explained that the elevated US inflation figures increase the probability of the Federal Reserve maintaining its tight monetary policy and continuing interest rate hikes. This, he noted, strengthens the US dollar and bond yields, consequently exerting downward pressure on global gold prices. Al-Moneeb indicated that these expectations have contributed to a global gold price reduction of about three percent, bringing prices closer to the US$ 4,000 per ounce mark.

He further elaborated that the Egyptian market's price decline is a result of both the global trend and a significant strengthening of the Egyptian pound against the US dollar. The dollar has seen a retreat from its peak of over LE 56 in late October to around LE 53.4 currently, which has amplified the effect of global price drops on the domestic market, according to al-Moneeb.

Outlook for Late 2026 into 2027

Looking ahead to late 2026 and into 2027, al-Moneeb anticipates continued price volatility, driven by fluctuating global geopolitical tensions. He observed a softening in demand for gold jewelry due to increased prices and reduced purchasing power stemming from the pound's depreciation. However, gold bars and coins remain attractive investment options. Al-Moneeb assured that buying has not ceased but has shifted, with some consumers capitalizing on price dips and others awaiting greater stability. He also mentioned instances of individuals selling gold to secure liquidity and cover living expenses amidst rising costs.

US Inflation's Impact on Precious Metals

Said Imbaby, CEO of the platform iSagha, concurred that US inflation exceeding forecasts places short-term pressure on gold and silver. This is because it lowers the likelihood of the Federal Reserve cutting interest rates, potentially leading to sustained hawkish monetary policy or further rate increases. Imbaby stated that such a scenario would bolster the US dollar and bond yields, diminishing the appeal of gold and silver as non-yielding assets.

Imbaby stressed the importance of differentiating between short-term market reactions and long-term fundamentals. He highlighted that gold continues to benefit from central bank purchases, concerns over debt levels, and ongoing geopolitical tensions. Projections for global gold prices in 2027 vary, with estimates ranging from around $ 4,250 to $ 4,650 per ounce.

For the Egyptian market, Imbaby emphasized that local price projections in Egyptian pounds must account for multiple factors, including global prices, the dollar-to-Egyptian-pound exchange rate, and supply and demand dynamics. He noted a consumer shift towards saving and investing in gold bars and coins due to lower making charges and easier resale compared to jewelry. This trend was reflected in increased investment demand for gold during the third quarter of 2026, despite a decline in jewelry demand.

Imbaby concluded by advising caution in the current market, recommending staggered purchases and avoiding impulsive decisions based on single-day movements or isolated reports. He explained that market trends are shaped by a complex interplay of economic factors, including US interest rates, dollar performance, inflation, investment and industrial demand, and geopolitical tensions.