Gold in Egypt falls as talks about hawkish Fed chair heat up

Gold in Egypt fell by four Egyptian pounds ($0.227) per gram Tuesday driven by a near one-week decline in global gold prices following reports saying the next U.S. Federal Reserve head is a policy hawk.

The twenty-four carat gold was sold for 724.55 pounds; while the widely-spread in Egypt, twenty-one carat gold scored nearly 634 pounds.  The 18 carat gold reached 543.40 pounds.

Gold pound also dived by around 24 pounds, to reach 5,072 pounds, Ehab Wasfy, a member at the gold department at the Federation of Egyptian Chambers of Commerce, told Amwal Al Ghad.

The metal in global markets slipped to a near one-week low on Tuesday on speculation that the eventual successor to Federal Reserve Chair Janet Yellen will favor higher interest rates, denting bullion’s appeal.

U.S. President Donald Trump is favouring policy hawk John Taylor as the next head of the Fed, Bloomberg reported, pushing the dollar higher and lifting U.S. Treasury yields. Taylor, a Stanford economist, is seen as more likely to raise rates than Yellen, which would boost the dollar and dent gold and U.S. Treasuries.

Gold generally declines in appeal when rates are higher as it yields no interest.

Spot gold was down 0.63 percent at $1,285.80 an ounce, while U.S. gold futures for December delivery slipped 1.17 percent to $1,287.80 per ounce.

“It’s partly (the possibility of a Hawkish Fed chair) and that the Fed is going to and needs to hike rates this year that is contributing to a bullish dollar environment,” said Martin Arnold, commodities analyst at ETF Securities, told CNBC on Tuesday.

Trump will meet with Yellen on Thursday as part of his search for a new candidate for her position, a source familiar with the planned meeting told Reuters.