11/6-18/6: Weekly precious metals prices & returns update – international gold slightly rises - local gold drops - and more
Market Watch
Weekly Change of Local & International Gold Prices
| Close | Close | Weekly Change | |
| International Gold (LBMA) ($/Oz) | 1,961.1 | 1,967.7 | ↑ 0.34% |
| International Gold (LMBA) ($/g) | 63.0 | 63.3 | ↑ 0.34% |
| International Gold ($/g) quoted in EGP | 1,951.3 | 1,957.8 | ↑ 0.34% |
| Local Gold (LE/g) (24k) | 2,656.8 | 2,565.5 | ↓ -3.44% |
| Premium/Discount* | 26.6% | 23.7% |
* Difference between the local and international traded price of gold
Weekly Change of Other Key Precious Metals Prices
| ($/Oz) | |||
| Silver | 24.3 | 24.2 | ↓ -0.4% |
| Platinum | 1,012.4 | 988.1 | ↓ -2.4% |
| Palladium | 1,327.2 | 1,415.9 | ↑ 6.7% |
Weekly Returns of Local Gold Compared to Alternative Asset Classes
| Local Gold (LE/g) (24k) | 2,656.8 | 2,565.5 | ↓ -3.44% |
| EGX 30 | 17,521.0 | 17,881.5 | ↑ 2.6% |
| 1 Year EGP T-Bill** (Yield) | 24.0 | 24.1 | ↑ 0.58%*** |
| Official Exchange Rate | 30.95 | 30.95 | 0% |
** Weighted average accepted bids of weekly one-year T-Bill
*** When the yield on T-Bills increases the price of the security decreases, therefore the weekly change is negative, and the opposite is true.
Global Update
Gold prices recorded a slight increase of 0.34% last week on the back of a drag in the U.S. dollar (DXY) and amidst continued expectations that the Fed would leave rates unchanged.
The gold price closed last week at $/Oz 1,968, up 0.34% from the previous week’s close of $/Oz 1,961. The international spot price of gold has been fairly stable over the past month, gradually recording gains, driven by decreased U.S. inflation, an overall decrease in long-term U.S. treasury yields during the same period, and expectations that the U.S fed will halt interest rate hikes for the foreseeable future.
U.S. Inflation is gradually cooling, with May 2023 inflation recording 4% annually, compared to 4.9% in April.
U.S. Inflation peaked at almost 9% by June 2022, and over the span of the last year has dropped by more than half, to a record 4% in May 2023. The cooldown in inflation is mainly attributed to the significant wave of interest rate hikes conducted by the Fed over the same 1-year comparison period. This drop in inflation further reiterates the fact that the Fed may now finally end its unprecedented monetary tightening cycle and keep the benchmark lending rate at 5%-5.25 moving forward.
Local Update
Last week, the price of the 24k local gold dropped by almost 3.44% to close the week at LE/g 2,566, down from the previous week’s close of LE/g 2,657.
The local price of the 24k gold has lost almost 15% of its value since its record-breaking high of a little over LE/g 3,000 during April and May of 2023. This drop can be attributed to the restricted liquidity in the market, resulting from the reluctance of gold holders to sell their gold, which was primarily bought during the April and May buying spree. In addition, stability in the foreign exchange market has also dampened demand for gold over the past period. But we need to remember that gold is a long-term investment, that preserves wealth and capital, especially in times of economic turbulence.