“Gold Prices Soar Near Record Highs After US Interest Rate Hike: Global and Egyptian Market Analysis”

Global gold prices rose to near record highs on Thursday, after the US central bank raised interest rates by 25 basis points, and hinted that it might refrain from further rate hikes, according to Reuters.

Thursday gold prices

By 0035 GMT, spot gold rose 0.8% to $2055.54 an ounce, and US gold futures rose 1.3% to $2063.20 an ounce.

Earlier in the session, gold prices rose to $2,072.19 an ounce, close to an all-time high of $2,072.49, reached in 2020.

And the US Central Bank raised the interest rate by 25 basis points, which is in line with market expectations, and the Central Bank did not say that it “expects” that there will be a need for further rate hikes, and only said that it will monitor the upcoming data; To determine whether further rate hikes “might be appropriate”.

The dollar index fell 0.2%, which makes gold denominated in the US currency less expensive for holders of other currencies.

As for other precious metals, silver increased in spot transactions by 0.5% to $25.72 an ounce, platinum rose 0.7% to $1056.29 an ounce, and palladium rose 0.8% to $1433.75 an ounce.

The ruble competes with the dollar

In this regard, economist Ahmed Khattab said that all central banks in the world tend to raise the interest rate as a form of controlling inflation and preserving capital in the country, even banks that were “zero interest” tended to make positive interest so that investors would not leave their country. .

Khattab added, during statements to “Echo of the Country,” that the Central Bank of Egypt will have to raise the interest rate by half percent at the next monetary policy meeting in May 2023 to preserve the deposits of foreigners and Egyptians, as well as attract more long-term direct investments in Egypt to control and reduce liquidity in the hands of The citizen, in order to reduce spending on recreational goods and focus on saving and spending on indispensable strategic goods such as education, medicine, water and electricity, indicating that this trend is general and taken by all central banks in the world.

And he continued: With regard to the dollar, after the Russian-Ukrainian war, if Russia wins, currencies around the world will be reconstituted, indicating that the dollar does not have a golden cover, and it is likely that the Chinese yuan will gradually occupy an international position in place of the US dollar in addition to the Russian ruble, and the euro will return. to its normal size.

He continued: The countries of the Gulf Cooperation Council and Egypt will have transactions between them in the local currency, so the demand for the dollar will be less, and it will decrease against world currencies, and this will take more than 3 years and will not be one time, and it will reach its fair price and not this exaggerated price.

Gold and the Egyptian market

For his part, journalist Walid Farouk, a specialist in economic affairs and the gold market, said that raising the interest rate would have a negative impact on gold, so that we saw a rise in gold prices yesterday in the trading session from 2074 to 2080 and then to 2050, due to the US Federal Reserve’s remark and hinted that There will be no increases in interest rates again, indicating that at the global level it will enhance gold profits globally.

Farouk added that if we talk at the level of the local market, it will not have a significant impact, as the local market has been separated from the global market for some time, pointing out that despite the high price of gold globally, we saw stability in the gold market locally, and it decreased by about 20 pounds, in addition to that the gold market has become A market closed to the global market, and since March 2022 the Egyptian state has taken a decision to stop importing gold due to the repercussions of the Russian-Ukrainian war, and therefore the impact will be somewhat marginal and the market will depend on supply and demand.

And Walid Farouk continued: With regard to expectations during the coming period on the Egyptian market, it will witness successive increases at the end of the year in large proportions, and there is a possibility that it will reach 4000 or 5000 if these mechanisms continue in the local market.