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3 minutes read | 02/04/23 - 09/04/23
2/4-9/4: Weekly precious metals prices & returns update – international gold hits the $/Oz 2,000 mark - local gold down slightly- and more.
Market Watch
Weekly Change of Local & International Gold Prices
| Close | Close | Weekly Change | |
|---|---|---|---|
| International Gold (LBMA) ($/Oz) | 1,968.9 | 2,007.5 | ↑ 1.96% |
| International Gold (LMBA) ($/g) | 63.3 | 64.5 | ↑ 1.96% |
| International Gold ($/g) quoted in EGP | 1,959.0 | 1,997.4 | ↑ 1.96% |
| Local Gold (LE/g) (24k) | 2,485.5 | 2,468.0 | ↓ 0.75% |
| Premium/Discount* | 21.2% | 19.1% |
*Difference between the local and international traded price of gold
Weekly Change of Other Key Precious Metals Prices
| ($/Oz) | Close | Close | Weekly Change |
|---|---|---|---|
| Silver | 24.1 | 25.0 | ↑ 3.5% |
| Platinum | 994.5 | 1,011.0 | ↑ 1.7% |
| Palladium | 1,459.0 | 1,469.8 | ↑ 0.7% |
Weekly Returns of Local Gold Compared to Alternative Asset Classes
| Close | Close | Weekly Change | |
|---|---|---|---|
| Local Gold (LE/g) (24k) | 2,485 | 2,468 | ↓ -0.7% |
| EGX 30 | 16,418 | 16,709 | ↑ 1.7% |
| 1 Year EGP T-Bill** (Yield) | 22.68 | 23.20 | ↑ 2.28%*** |
| Official Exchange Rate | 30.95 | 30.95 | 0% |
*** 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 price hits the $/Oz 2,000 mark.
Last Wednesday gold reached an almost 1-year high to close the week at $/Oz 2,007, up from $/Oz 1, 969 during the previous week’s close, constituting a 2% weekly increase. Gold’s “safe haven” qualities have been apparent over the course of the past few months, as pressures on the dollar (DXY), high global inflation and the banking crisis have taken a toll on bond and equity markets.
The IMF thinks that the next 5 years will witness slow global economic growth of around 3%.
The IMF’s managing director stated last week that projections point to a major downgrade in global GDP medium term outlook, from an average of 6.1% to 3%. She added that this updated growth projection is the lowest in 3 decades.
Local Update
The local gold price has been gradually decreasing over the past week due to higher demand for the new high yielding CDs, issued last week by Egypt’s national banks.
The 24k local gold recorded a slight 0.7% weekly drop to close last week at LE/g 2,468. As interest rates continue to rise in Egypt, and as banks provide high yielding investment channels, we may see reduced demand for gold over the coming period. However, as inflation and expectations of further EGP devaluations continue to rise, Egyptians demand for gold will grow.
In line with the IMF’s pessimistic growth outlook update conducted last week, the World Bank downgrades Egypt’s FY 2023 GDP growth from 4.8% to 4%.
The WB stated in its report that a major factor to hold accountable for the downgrade in GDP growth is Egypt’s soaring inflation.
Egypt starts global auction for gold exploration in the Eastern Desert.
The move is expected to attract major international mining companies to Egyptian soils and may very well be an initial step to place Egypt on the global precious metals value chains.
Egypt’s Net Foreign Reserves increase to $34.4 billion in March, up from $34.3 billion in February.
Egypt’ reserves have been gradually gaining back some their losses sustained last year in the midst of the difficult monetary environment and implications of the Russia/Ukraine war.
What to look Out for This Week
Keep an eye out for Egypt’s Inflation coming out this week.