3 minutes read | 24/09/23 - 01/10/23
24/9-1/10: Weekly precious metals prices & returns update – international gold drops - local gold drops, oil prices rise, and more.
Market Watch
Weekly Change of Local & International Gold Prices
| Close | Close | Weekly Change | |
|---|---|---|---|
| International Gold (LBMA) ($/Oz) | 1,918.9 | 1,848.0 | ↓ 4.00% |
| International Gold (LMBA) ($/g) | 61.9 | 59.4 | ↓ 4.00% |
| International Gold ($/g) quoted in EGP | 1,915.3 | 1,838.7 | ↓ 4.00% |
| Local Gold (LE/g) (24k) | 2,522.0 | 2,468.0 | ↓ 2.14% |
| Premium/Discount* | 24.1% | 25.5% |
*Difference between the local and international traded price of gold
Weekly Change of Other Key Precious Metals Prices
| ($/Oz) | Close | Close | Weekly Change |
|---|---|---|---|
| Silver | 22.6 | 22.2 | ↓ 1.7% |
| Platinum | 931.3 | 908.6 | ↓ 2.4% |
| Palladium | 1,255.2 | 1,248.4 | ↓ 0.5% |
Weekly Returns of Local Gold Compared to Alternative Asset Classes
| Close | Close | Weekly Change | |
|---|---|---|---|
| Local Gold (LE/g) (24k) | 2,522.0 | 2,468.0 | ↓ 2.14% |
| EGX 30 | 20,086 | 20,174 | ↑ 0.44% |
| 1 Year EGP T-Bill** (Yield) | 25.5 | 25.8 | ↑ 1.18%*** |
| Official Exchange Rate | 30.95 | 30.95 | 0.00% |
** When the yield on T-Bills increases the price of the security decreases, therefore the return is negative, and the opposite is true.
Global Update
International gold fell steeply last week to close at $/Oz 1,848 compared to a close of $/Oz 1,848 during the previous week, constituting a substantial 4% weekly drop. This primarily came on the back of the strong dollar’s performance over the comparison period, instigated by market expectations of a higher interest environment for the foreseeable future.
Last week the international gold price recorded an 8-month low of $/Oz 1,848, after maintaining its value above the $/Oz 1,900 for the better part of the year. The sudden and sharp drop in gold last week came as a result of the dollar (DXY) recording a 10-month high of around $106, compared to major currencies. Moreover, demand for the dollar has been gradually increasing over the past period primarily due to elevated treasury yields.
Due to dwindling crude oil stocks and reserves, oil prices hit a new yearly high, with Brent prices reaching $95/barrel last week.
As the OPEC+ continues to cut oil production, and as decreased stock levels persist, it is expected that oil prices will remain elevated over the upcoming period, potentially breaking the $100/barrel mark.
Local Update
Last week, the price of the 24k local gold slid by 2.1% to close the week at LE/g 2,468 down from the previous week’s close of LE/g 2,522. This primarily reflects the steep drop in international gold in addition to local market dynamics.
The international gold price has witnessed recent stability, however last week’s 4% drop, has placed downward pressure on local gold. In addition, the local price of the 24k gold continued to lose ground due to the recent stability in the foreign exchange market and the sufficient supply of gold within the local market.
Egypt entered into a currency swap agreement with the UAE last week. The agreement will unlock around $1.5 billion for Egypt to help meet import and debt obligations.