Gold prices in Egypt surged on Friday, August 29, 2025, with 21-karat gold reaching EGP 4,650 (approximately $97.65), marking a sharp response to the Central Bank of Egypt’s recent decision to lower key interest rates by 2%. The move is seen as a stimulus for gold demand, particularly among local buyers.
Domestic gold prices hit new highs
On Friday, gold prices in Egypt witnessed a continued rise, extending gains from the previous day. The 21-karat variety, the most widely traded in the country, climbed to EGP 4,650 ($97.65) per gram during evening trade. Earlier in the day, it had been recorded slightly lower at EGP 4,640 ($97.44). The price of the gold pound (weighing approximately 8 grams of 21-karat gold) increased to EGP 37,200 ($781.20), up from EGP 37,120 ($779.58) earlier in the day. The upward movement came in close succession to the Central Bank of Egypt’s (CBE) decision to reduce interest rates by 200 basis points on Thursday, August 28, 2025, a development that typically channels more demand into non-interest-bearing assets like gold. In global markets, an ounce of gold traded at approximately $3,417.79 during the day. Meanwhile, gold futures for December delivery rose by 0.5%, or $17.5, to settle at $3,466.1 on Thursday, reflecting support from a weakening US dollar ahead of inflation data expected tomorrow. Below is the full breakdown of domestic gold prices in Egypt as of Friday:
| Type of Gold | Selling Price (EGP) | Purchase Price (EGP) | Selling Price (USD) | Purchase Price (USD) |
|---|---|---|---|---|
| 24-karat | 5,314.25 | 5,285.75 | $111.60 | $111.00 |
| 22-karat | 4,871.5 | 4,845.25 | $102.30 | $101.75 |
| 21-karat | 4,650 | 4,625 | $97.65 | $97.13 |
| 18-karat | 3,985.75 | 3,964.25 | $83.70 | $83.25 |
| 14-karat | 3,100 | 3,083.25 | $65.10 | $64.75 |
| Gold Pound | 37,200 | 37,000 | $781.20 | $777.00 |
(Currency conversion: 1 EGP = $0.021)
Interest rate cut signals policy shift
On Thursday, August 28, 2025, the Central Bank of Egypt implemented a significant monetary policy adjustment, cutting key interest rates by 200 basis points. The overnight deposit rate now stands at 22%, the lending rate at 23%, and the main operation and discount rates both at 22.5%. The decision was made during the Monetary Policy Committee’s scheduled meeting and was attributed to multiple factors, including:
- Reduced global and local inflationary pressures
- An improved economic growth outlook
- Diminished external and fiscal risks
Domestically, the CBE cited signs of economic stabilization. Real GDP growth for the 2024/2025 fiscal year is forecasted at 4.5%, a considerable improvement over the 2.4% recorded the previous year. Meanwhile, the unemployment rate showed further recovery, declining to 6.1% in Q2 of 2025, down from 6.3% in Q1. The interest rate cut is expected to boost investment and consumer spending, factors that also tend to drive demand for gold, viewed as both a safe haven and a hedge against currency depreciation and inflation.
Global backdrop: Fed holds, dollar weakens
The CBE’s decision aligns with broader global monetary policy trends. The US Federal Reserve recently opted to hold its benchmark interest rate unchanged at 4.25%–4.50% during its fifth policy meeting of 2025. The decision reflects a cautious stance by Fed Chair Jerome Powell, despite growing pressure from US President Donald Trump, who has repeatedly urged for rate cuts since taking office earlier this year. The Federal Reserve’s pause, combined with a weakening dollar, supported gold prices internationally. With US inflation data due tomorrow, global investors have taken defensive positions, increasing demand for precious metals.
Gold preferences in the Egyptian market
Different karats of gold hold varying appeal for buyers across Egypt:
- 18-karat gold remains a favorite among younger consumers due to its affordability and design variety.
- 21-karat gold enjoys the widest demand in the market, balancing price and quality.
- 24-karat gold is primarily purchased by investors and used in coins and bullion, offering the highest purity and best long-term value.
