21/5-28/5: Weekly precious metals prices & returns update – international gold drops - UK inflation cools - local gold drops - and more.
Market Watch
Weekly Change of Local & International Gold Prices
| Close | Close | Weekly Change | |
| International Gold (LBMA) ($/Oz) | 1,977.7 | 1,946.0 | -1.6% |
| International Gold (LMBA) ($/g) | 63.6 | 62.6 | -1.6% |
| International Gold ($/g) quoted in EGP | 1,967.8 | 1,936.2 | -1.6% |
| Local Gold (LE/g) (24k) | 2,754.0 | 2,673.0 | -2.9% |
| Premium/Discount* | 28.5% | 27.6% |
* Difference between the local and international traded price of gold
Weekly Change of Other Key Precious Metals Prices
| ($/Oz) | |||
| Silver | 23.9 | 23.3 | -2.4% |
| Platinum | 1,067.3 | 1,025.5 | -3.9% |
| Palladium | 1,511.9 | 1,426.7 | -5.6% |
Weekly Returns of Local Gold Compared to Alternative Asset Classes
| Local Gold (LE/g) (24k) | 2,754.0 | 2,673.0 | -2.9% |
| EGX 30 | 16,745.5 | 17,132.0 | 2.3% |
| 1 Year EGP T-Bill** (Yield) | 23.8 | 23.8 | 0.3%*** |
| 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 dropped last week by around 1.65% from $/Oz 1,977 to close the week at $/Oz 1,946. The slight drop in gold prices can be attributed to the recent rally in the U.S. dollar and U.S treasury yields.
Yields on both long- and short-term U.S. treasuries have been on steady climb over the past weeks reflecting expectations of the halt in interest rate hikes on the part of the Fed. Higher yields have pushed the DXY (dollar) index upwards to close last week at $104.2 compared to a close of $103.2 during the previous week. A stronger dollar and higher yielding treasuries have in turn placed downwards pressures on gold prices, which dropped last week by around 1.65% from $/Oz 1,977 to close the week at $/Oz 1,946.
Germany in recession, with Q1 2023 GDP growth of -0.3%.
U.K inflation cools in April, recording 8.7% down from 10.1% in March.
Inflation in the U.K dropped to 8.7% in April, which is the first record of 1-digit inflation levels since August of 2022. Higher prices and rising interest rates throughout the past period put the brakes on private consumption, this combined with the overall drop in energy prices have resulted in the slowdown in inflation.
Local Update
Last week, the price of the 24k local gold dropped by almost 2.9% to close the week at LE/g 2,673, down from a previous week’s close of LE/g 2,754.
Stability in the foreign exchange market and the post-holiday season drag on consumer spending, has put the breaks on the upwards price trend of local gold which exceed the LE/g 3,000 mark in early May. However local gold is still trading 27% higher than the international gold price, pointing to prevalent demand side pressures and shortages in supply.
What To Look Out for This Week
Electricity prices may increase during the coming period.
Keep an eye out for new tax increases as parliament delves deeper into discussions around new development fees, and income tax increases.