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Gold prices fell on Monday due to profit-taking after hitting a nearly two-month high. This rise was driven by escalating clashes between Israel and Iran over the weekend, which heightened fears of a wider regional conflict.
The price of gold fell 0.5% today, having started today’s session at a two-month high of $3,451 per ounce before beginning to decline and reaching a daily low of $3,409 per ounce. Gold is currently trading at $3,416 per ounce, having opened today’s session at $3,440 per ounce.
Gold has managed to consolidate above $3,400 per ounce, continuing the short-term upward trend. We may witness a breakout of the all-time high of $3,500 per ounce and a new record high, according to Gold Billion.
The rise in gold prices stems from the conflict between Iran and Israel following the exchange of attacks that began at the end of last week and continued through the weekend. This conflict represents a renewed escalation in tensions between Middle Eastern countries and has raised concerns about the involvement of more regional powers.
Focus has also been on any potential US intervention in the conflict, after President Donald Trump stated that his administration is working to reach an agreement. However, Trump also said that Israel and Iran may have to “fight to the end,” which may indicate that a ceasefire is not imminent.
Gold Billion analysis indicated that the profit-taking that occurred at the beginning of the week’s trading does not mark the end of the uptrend, but rather falls within the scope of a negative correction, maintaining the current uptrend.
Separately, financial markets are focusing this week on the Federal Reserve meeting, which is likely to leave interest rates unchanged on Wednesday. The focus will be directly on Fed Chairman Jerome Powell’s comments on the path of interest rates, especially given signs of slowing inflation and economic growth.
Crude oil prices retreated at the beginning of the week after hitting a six-month high due to current geopolitical tensions, as well as expectations that Iran will close the Strait of Hormuz, a global energy artery.
Rising crude oil prices were the reason gold gained further support last week, as higher crude oil prices are expected to increase inflationary pressures on the global economy, thus increasing demand for gold as a hedge against inflation.
The People’s Bank of China announced another gold purchase in May, the seventh consecutive month of purchases, adding 1.9 tons to its gold reserves, which now stand at 2,296 tons, equivalent to 6.7% of China’s total foreign exchange assets.
Meanwhile, gold ETFs in China lost 3.3 billion yuan ($461 million) in May, the first monthly outflow since January. Total assets under management fell to 153 billion yuan ($21 billion), and their holdings fell by 4.6 tons to 198 tons.
Gold Prices in Egypt
The price of gold in Egypt declined during today’s trading, due to a decline in the global gold price. This reduced the upward momentum of the price, pushing it back down, especially after the significant increase it witnessed over the past two days during the global market’s closure.
The most popular 21-karat gold opened trading on Monday at 4,920 Egyptian pounds per gram, trading at 4,890 Egyptian pounds at the time of writing. It rose by 45 Egyptian pounds yesterday, closing at 4,940 Egyptian pounds per gram, after opening trading yesterday at 4,895 Egyptian pounds per gram.
The decline in the local gold price today follows a significant increase over the past two days due to fears of a war between Iran and the Zionist entity and its expected regional impact, in addition to a further rise in the dollar exchange rate against the pound.
The war has partially increased foreign outflows from Egyptian debt instruments, which has led to increased demand for the dollar and, consequently, a rise in its exchange rate against the pound. This has been a major support for the rise in the local gold price, which is based on the dollar exchange rate in banks.
Gold Billion’s analysis indicated that the price increase was exaggerated, especially given the lack of increased local demand for gold during this period. The increase may have been due to the dollar being overvalued in banks, due to some expectations that it could continue to rise in the coming days.
Gold Price Forecast
The global price of gold declined at the start of trading this week due to profit-taking, following the significant increase it witnessed last week due to geopolitical tensions in the Middle East, which increased demand for gold as a safe haven.
Local gold declined during today’s trading after a significant increase over the past few days. Today’s price decline is due to a decline in the global price of gold, while the rate of decline remains weak due to the rise in the dollar exchange rate against the pound, which supports local gold pricing.
Global gold has managed to stabilize above $3,400 per ounce and is now working to gain further upward momentum to break through the $3,450 per ounce level and target its all-time high of $3,500 per ounce.
As for the local price:
Local 21-karat gold rose, breaching the EGP 4,900 per gram level at the beginning of this week, attempting to stabilize above this level and approach the psychological level of EGP 5,000 per gram. However, it quickly lost upward momentum and retreated today in an attempt to stabilize above the EGP 5,000 level.
