Arab FinanceExperts in the gold industry expect that the prices of the yellow metal will rise during the coming period in Egypt, especially with the US Federal Reserve moving towards reducing interest rates during its next meeting on December 18, 2024, which will lead investors to invest in gold as a safe and profitable haven and an alternative to… Investing in stocks and bonds, which will lead to its rise globally, and thus the price to rise in Egypt, in addition to the Christmas and New Year holidays, during which the demand for buying gold increases, which raises its prices locally, as 21 karat is likely to rise, which is One of the most common standards in Egypt will rise to 4,200 pounds per gram at the beginning of the new year 2025, according to confirmation from experts who spoke in exclusive statements to Arab Finance.
Experts revealed that the current timing is the best time to buy gold in Egypt, as the chances of profitability increase in the future, and in the near term, as gold is one of the safe havens for investment.
Gold is on a new upward path
For his part, Osama Zari, head of the analysis department at Gold Era for Investment and Gold Trading, said in exclusive statements to Arab Finance that the gold market ended selling operations that lasted for three weeks strongly and with performance on a new upward path.
Zari explained that gold not only exceeded last week’s losses, but also witnessed its best rise since October 2023, as prices rose by 5.4%. Since the beginning of the week.
Zari stressed that while gold prices have risen significantly since Republican candidate Donald Trump became president, many are talking that these gains may be more fragile than they appear because the price movement is primarily driven by renewed demand for safe havens in the wake of the escalation in the war in Ukraine. The United States recently granted Ukraine permission to fire American-made missiles at Russia, adding a new dimension to the conflict.
Saxo Bank points out that the conversation is still with Zari: Gold has recovered very quickly despite the continued headwinds from the strength of the dollar, and if we compare the performance of gold with silver, we will confirm that this rise is due to gold being a safe haven, which has led to new momentum for buying from investors. If we do not see additional measures in Eastern Europe, the upside from here will likely be limited until we get some clarity on the actions of Trump and the US Federal Reserve. One of the headwinds we are seeing now is the strength of the US dollar against the strength of gold. Contrary to their relationship, we at Gold Era say that the strength of the dollar conflicts with the broader goal of boosting exports. For Trump's second plan to succeed, fiscal policies such as tariffs must be coupled with monetary policies aimed at weakening the dollar, and this requires the Federal Reserve to intervene to limit the strength of the dollar and balance inflationary pressures at home with deflationary pressures abroad.
Zari explained that gold is trading less than 4% away from its highest levels ever and may retest those levels if geopolitical tensions ignite a wave of risk aversion. In addition, the US personal consumption expenditures report and other US data during this week may affect expectations for gold’s path. If weak US data supports the case for a rate cut in December, gold bulls may gain new momentum and vice versa.
Zari continued: If we look here at contract movements, commercial companies reduced their net selling positions in the fourth week in a row to -262.3 thousand contracts worth -69 billion dollars. This is the lowest level in 5 months), and over the past four weeks they reduced their exposure by 6.2 million ounces. Or $16.4 billion, which means they are preparing for a bull market. But if we look at the movements of the contracts collectively, we will see that the recent rise in gold’s path was not accompanied by liquidity in the markets, meaning that it had no basis, but rather was the result of geopolitical fear, and we expect prices to fall with the opening of the markets and then return again to the rise.
He added that the highest percentage of execution that occurred last week was at 2700 levels, so it may be our most important support levels during this week, but there may be movements below it to activate stop loss levels and then rise again.
Zaree continued: The week may be a sharp trading week due to the geopolitical situation and the reading of some American indicators. Accordingly, we expect the following: – That the levels of 2728-2735 will be resistance levels for the markets, and then they will fall from there to the levels of 2700, and we expect that they will be broken by targeting the levels of 2690 – 2680 and then rise again to levels of 2700, then 2720, then 2750.
Expectations of a rise in gold prices in the coming period
For his part, Naguib Naguib, former Secretary General of the Gold Division of the Cairo Chamber of Commerce, said in exclusive statements to Arab Finance that all indicators point to an increase in the price of gold during the coming period, especially with global and regional variables related to geopolitical changes and unrest in the region, noting that the price of gold rose in Egypt during The last week, from 3,550 pounds to 3,780 pounds, which is a significant increase of about 230 pounds in the price of a gram of 21 carat.
Naguib added that the price of an ounce is currently $2,715, and it is expected that the price will reach $3,000 per ounce at the beginning of next year, according to the US Federal Reserve’s intention to reduce the interest rate from 25 to 50 basis points during its next meeting, December 18, 2024, which will increase the chances of a rise in interest rates. Gold prices globally, as the ounce is expected to rise after the US Federal Reserve meeting as a result of investors moving towards investing in gold.
It is expected that the price of a gram of gold will reach 4,200 pounds at the beginning of the new year
For his part, Amir Rizk, an expert in the gold industry, said that the decline in the price of gold that occurred after the victory of US President Donald Trump was a result of profit-taking and a correction in the global market, as the rise in the US dollar index and US Treasury bond yields led to pressure on gold, amid optimism that the Trump administration It will lead to better economic growth in the United States of America, but nevertheless, the rise in inflation may come in favor of gold, stressing that there is currently a clear rise in gold prices in Egypt, whether in the local market or the global market, as many investors have resorted to buying gold with expectations of a reduction. The interest rate set by the US Federal Reserve, as gold is one of the safe and profitable havens for investment. It is expected that the price of a gram of gold in Egypt at the beginning of the new year will reach 4,200 pounds.
Rizk added that gold is expected to rise on the global stock market, which will lead to its rise in Egypt in the coming period. The rise in the price of the dollar also leads to a rise in the price of gold, as the dollar has recently risen in Egypt and globally against other currencies, all of which are indicators that suggest a rise in gold prices during the coming period.
Best time to buy gold
Rizk advised those wishing to invest in gold to buy it during the current period, especially buying bullion for the purpose of investment, as the chances of profitability increase with the rise in its price in the coming days.
Rizk described the market situation in Egypt currently as stagnant, as there is weakness in the buying and selling movement, but he stressed that the current state of the market will not last long, and it is expected that the gold buying movement will increase, which will increase the demand for it and reduce the supply, which will lead to an increase in prices in the future.
During its last meeting this month, the US Federal Reserve (US Central Bank) reduced the interest rate for the second time in a row during 2024, by 25 basis points, so that it now ranges between 4.5 and 4.75%.
The bank's Monetary Policy Committee said in a statement issued at the conclusion of its meeting that “labor market conditions are improving,” and while “inflation has made progress in returning to the 2% target, it remains high.”
It is noteworthy that in September 2024, the US Federal Reserve reduced its interest rate for the first time since 2020, by 50 basis points, so that it now ranged between 4.75 and 5%. There is also a state of uncertainty about the extent of the Federal Reserve’s need for cuts as the economy continues. Overall strong growth.
The interest rate reduction by the US Federal Reserve leads to an increase in the price of gold as a result of hedging it due to the state of economic uncertainty.
Gold rose by about 30% this year to successive record levels, with gains supported by increasing geopolitical and economic risks, which prompted increased purchases by central banks and investors.
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