Gold Prices See Significant Surge Amidst Global Market Uncertainty
Gold prices have surged 5.9% since early March, peaking at $3,057 per ounce. The U.S. Federal Reserve’s interest rates remain steady, predicting rate cuts due to ongoing uncertainties. Geopolitical risks are driving demand for gold, with forecasts suggesting prices may stabilize or increase. Local markets, such as in Egypt, have mirrored these global trends, with rising prices, driven primarily by international influences.
Gold prices have experienced substantial growth, notably rising by 5.9% since early March. Last week marked a notable progression, with gold rising by 1.3%, peaking at a record $3,057 per ounce before closing at $3,023 per ounce. The surge since the beginning of 2025 is impressive at 15.2%, achieving 16 record highs, including four surpassing the $3,000 mark.
In terms of monetary policy, the U.S. Federal Reserve maintained consistent interest rates at 4.25%-4.50%, aligning with market expectations. Projections suggest two quarter-point rate cuts by 2025 due to persistent uncertainty regarding trade policies, inflation, and labor market conditions, lessening the need for immediate monetary policy adjustments.
Despite the positive trajectory of gold, recent profit-taking and a strengthening U.S. dollar led to declines during the last two trading sessions of the week. This inverse relationship exerted downward pressure on gold prices. However, geopolitical uncertainties continue to fuel demand as investors seek gold as a safe-haven asset amid ongoing tensions, such as recent airstrikes by Israel affecting Gaza.
Analysts from the World Gold Council (WGC) propose that gold may stabilize in the short term due to its recent rapid gains, yet expect ongoing demand influenced by geopolitical tensions, inflation, and anticipated interest rate cuts. Should gold remain above $3,000 for the coming weeks, heightened buying activity is projected.
ANZ Bank has adjusted its gold price forecast, predicting $3,100 per ounce within three months and $3,200 over six months, citing heightened geopolitical risks. Additionally, ETF inflows into gold-backed funds have remained robust, with inflows reaching 32.7 tonnes for the week ending March 14, indicating sustained investor confidence.
In Egypt, local gold prices soared, reaching new highs with 21K gold trading at EGP 4,280 per gram. This increase is attributed primarily to surging global prices. Local price dynamics were influenced more by international trends than supply/demand, with profit-taking causing short-term fluctuations before potential breaking levels above EGP 4,300.
Market stability within Egypt has improved, following a successful IMF review and new loan approval, leading to speculations about potential interest rate cuts from the Central Bank of Egypt due to falling inflation. Investors are acutely aware of international economic conditions, attending to central bank policies and geopolitical events.
In conclusion, gold prices have seen significant fluctuations driven by a combination of market uncertainty, geopolitical risks, and monetary policy forecasts. With strong demand for gold as a safe-haven asset, coupled with the outlook of reduced interest rates, the precious metal is likely to continue its upward trajectory. Local markets will respond closely to global pricing movements as economic conditions evolve.
Original Source: www.dailynewsegypt.com
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