Gold prices could surge to nearly USD 5k an ounce if the Federal Reserve’s independence is compromised, the Financial Times reports, citing forecasts by Goldman Sachs. The bank's base case scenario is a rise to USD 4k per troy ounce by mid-2026, but a 1% shift of private investment from US Treasuries to gold could drive the price even higher.

The rationale: “A scenario where Fed independence is damaged would likely lead to higher inflation, lower stock and long-dated bond prices and an erosion of the USD’s reserve currency status,” co-head of global commodities research at Goldman Sachs Daan Struyven told the FT.

Gold has already rallied 35% this year to over USD 3.5k an ounce, becoming a top-performing global asset. Both investors and central banks have been increasing their holdings in the precious metal as a hedge against political uncertainty, debt, and potential inflation from a politicized Fed, especially as traditional havens like the USD and government bonds falter.

The Trump effect on Gold: Concerns over US President Trump’s pressure on the central bank prompted European Central Bank head Christine Lagarde to warn of a “very serious danger” to the global economy. The uncertainty is boosting demand for gold, said Hargreaves Lansdown’s Derren Nathan, in a separate BBC report. The trend was echoed by Pictet Asset Management's Arun Sai, who said the political climate reinforced his firm's decision to maintain a significant gold position.

Fed under pressure: The Justice Department has opened a criminal mortgage fraud investigation into Federal Reserve member Lisa Cook, a move critics describe as a politically motivated escalation of the Trump administration's effort to oust her and put pressure on Fed Chair Jerome Powell to lower interest rates, The Washington Post reported, citing sources it said are in the know. Resignations and ended terms are increasingly tipping the balance of the Fed board in Trump’s favor.

EGX30

34,762

-1.1% (YTD: +16.7%)

USD (CBE)

Buy 48.52

Sell 48.65

USD (CIB)

Buy 48.53

Sell 48.63

Interest rates (CBE)

22.00% deposit

23.00% lending

Tadawul

10,656

+0.3% (YTD: -11.5%)

ADX

10,034

-0.2% (YTD: +6.5%)

DFM

5,989

+0.3% (YTD: +16.1%)

S&P 500

6,482

-0.3% (YTD: +10.2%)

FTSE 100

9,208

-0.1% (YTD: +12.7%)

Euro Stoxx 50

5,318

-0.5% (YTD: +8.6%)

Brent crude

USD 65.50

-2.2%

Natural gas (Nymex)

USD 3.05

-0.9%

Gold

USD 3,653

+1.3%

BTC

USD 110,138

-0.6% (YTD: +17.7%)

S&P Egypt Sovereign Bond Index

912.86

+0.1% (YTD: +17.4%)

S&P MENA Bond & Sukuk

149.46

+0.5% (YTD: +6.8%)

VIX (Volatility Index)

15.18

-0.8% (YTD: -12.5%)

THE CLOSING BELL-

The EGX30 fell 1.1% at Wednesday’s close on turnover of EGP 3.9 bn (11.3% below the 90-day average). International investors were the sole net buyers. The index is up 16.9% YTD.

In the green: Emaar Misr (+1.1%) and Juhayna (+0.1%).

In the red: Ibnsina Pharma (-4.1%), Misr Cement (-3.4%), and Palm Hills Development (-3.1%).

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