The Marsad Al Dahb reported that gold prices in Egypt and international markets faced selling pressure during Tuesday's trading, driven by profit-taking after the precious metal's strong gains in the previous session. Investors were awaiting US inflation data and the signals it might provide about the Federal Reserve's monetary policy in the coming period.

The Director of the Marsad Al Dahb for Economic Studies said gold prices had fallen by about EGP 65 during the day's trading compared with the previous session's close. A gram of 21-karat gold stood at about EGP 6,200, while 24-karat gold was around EGP 7,086 per gram and 18-karat gold was about EGP 5,314. The gold pound was priced at approximately EGP 49,600.

Internationally, gold fell by about $65.95 to around $4,076 an ounce, after coming under limited pressure as investors took profits following gains of more than 1% during Monday's trading. Markets were awaiting the US Consumer Price Index, one of the key indicators shaping interest-rate expectations.

According to Marsad Al Dahb data, a gram of 21-karat gold closed Monday's trading at EGP 6,265, while the international ounce closed at $4,141.95.

The director noted that the US dollar exchange rate against the Egyptian pound stood at about EGP 53.40, one of the factors affecting domestic gold pricing alongside international ounce prices and local supply and demand.

Profit-taking and inflation expectations weigh on gold

Globally, gold prices declined during Tuesday's trading as investors locked in profits after a rally of more than 1% in the previous session, amid caution ahead of US inflation figures.

The precious metal came under pressure as markets increasingly expected the Federal Reserve to raise interest rates at its December meeting. US economic data showed continued labour-market strength, giving the central bank more room to maintain a restrictive monetary stance to combat inflation.

The US employment report released last Friday showed that the economy added about 165,000 jobs in October. The unemployment rate also fell to 4.1%, compared with around 4.2% in September.

Employment figures for August and September were revised upward by a combined 84,000 jobs, reinforcing expectations that the US labour market remained resilient and maintaining pressure on the Federal Reserve to keep fighting inflation.

Speaking during Monday's trading, Richmond Federal Reserve President Tom Barkin said inflation remained the greatest risk to the US economy. He stressed the need for monetary policy to move carefully amid continuing price pressures and uncertainty about the appropriate path for upcoming decisions.

On the geopolitical front, developments in the war between the United States and Iran continued to influence investor sentiment, despite easing fears of another military escalation.

Lower oil prices are an important factor in markets' calculations, as they may ease inflationary pressures and reduce the need for continued monetary tightening, providing support for gold over the medium term.

At the same time, continued uncertainty about the prospects for a settlement keeps a geopolitical risk premium in the market and limits the ability of interest-rate pressures to drive gold into deeper declines.

US inflation data to shape gold's next move

Investors were looking ahead to the release of the US Consumer Price Index for October on Tuesday at 3:30 p.m. Cairo time, according to the US Bureau of Labor Statistics schedule. Producer Price Index data were due to follow on Friday, November 13.

Inflation figures are particularly important in determining gold's direction in the coming period. Persistently elevated price pressures could strengthen the case for the Federal Reserve to raise interest rates, increasing the opportunity cost of holding the precious metal and limiting its gains.

Conversely, signs of slowing inflation could revive market expectations of future monetary easing and give gold an opportunity to extend its recovery, particularly if accompanied by a weaker US dollar and lower Treasury yields.

Gold's movements in the coming sessions therefore remain dependent on how inflation data compare with market expectations, alongside Federal Reserve officials' remarks and geopolitical developments, as supportive factors continue to compete with pressures arising from expectations of monetary tightening.