Gold prices fell by more than 2 percent during trading on Monday, with rising oil prices reinforcing inflation fears and supporting expectations that the Federal Reserve will continue to raise interest rates.
Spot gold fell 2.1 percent to $4,198.10 per ounce by 03:57 GMT, on track to record its largest daily loss since September 1. Gold futures in the United States also fell 2.1 percent to $4,231 per ounce.
Tim Waterer, chief market analyst at KCM Trade, said: “The combination of rising bond yields and oil prices continues to be a burden on gold. “Oil prices rose amid mixed signals regarding crude flows, which keeps inflation at the forefront of investors’ concerns.”
Iran stressed that diplomacy alone can put an end to the conflict with the United States and Israel, after US President Donald Trump said that he rejected an Iranian proposal to reopen the Strait of Hormuz and end the fighting. Oil prices continued to rise.
The Federal Reserve had lowered interest rates earlier this month, by a quarter of a percentage point, with the target interest ranging between 3.75 and 4 percent. Markets are currently pricing in a 68 percent probability of a US interest rate hike in October, according to the CME Group's Fed Watch tool.
High energy prices can fuel inflation by increasing costs in various sectors of the economy. While gold is widely viewed as an inflation hedge, rising interest rates increase the opportunity cost of holding the non-yielding metal.
This week, the markets are awaiting a set of US economic data related to the labor market and inflation, including job vacancies, the ADP employment report, the personal consumption expenditures (PCE) index, in addition to the non-farm payrolls report.
Waterer said that the release of stronger-than-expected data on inflation or the labor market may keep bond yields under upward pressure, and increase pressure on gold prices.
Beth Hammack, President of the Federal Reserve Bank of Cleveland, said on Friday that she is concerned that continued high inflation may lead Americans to consider rising prices as normal, adding that the central bank cannot allow that to happen.
In other precious metals, spot silver fell 3.4 percent to $62.08 per ounce, platinum fell 2.7 percent to $1,730.78, while palladium fell 2.8 percent to $1,231.46.
Oil prices rose more than 1 percent in early trading on Monday, after US President Donald Trump rejected an Iranian peace proposal aimed at ending the conflict and reopening the Strait of Hormuz, keeping tensions in the Middle East high.
Brent crude futures rose $1.32, or 1.27 percent, to $105.64 per barrel by 00:36 GMT, while US West Texas Intermediate crude rose 70 cents, or 0.76 percent, to $93.11.
Last week, during the United Nations General Assembly meetings in New York, Iran announced a peace proposal that it said was conveyed to the American side through Qatari mediation. Trump said on Saturday that he rejected the proposal, but he told Axios in a phone interview on Sunday that he expected American negotiators to hold more talks this week.
“Geopolitical risks remain high, with the Houthis and Iran continuing their attacks on Saudi Arabia, making supply flows in the region vulnerable,” ANZ analysts said in a note.
Brent crude rose 0.4 percent last week, while West Texas Intermediate crude fell 7.9 percent, amid fears that the United States might ban diesel exports in an attempt to contain record prices, which in turn could lead to a reduction in the production of American refineries.
ANZ analysts said, “Refined petroleum products remain a pressure point, with US diesel prices rising to record levels, increasing inflation risks and renewing discussion about potential restrictions on exports.”
They added that any restrictions on US diesel exports would lead to a tightening of supplies outside the United States, noting that European prices have begun to react to the possibility of a decline in US supplies.
Meanwhile, crude oil exports from major producers in the Middle East rose to 12.8 million barrels per day in September, the highest level since the war began in February, according to preliminary data from Kpler issued on Monday, with Saudi Arabia and the UAE increasing their exports.
This recovery came after improved shipments through the Strait of Hormuz, which are expected to reach about 7.4 million barrels per day this month, according to the data.
Saudi Arabia transferred part of its exports from the port of Yanbu on the Red Sea to the port of Ras Tanura on the Gulf Coast, following the attacks that damaged the “East-West” pipeline.
When Mahmoud Fahmy, a forty-year-old employee, travels from his residence in the 6th of October district (west of Cairo) to his hometown in Assiut Governorate (Upper Egypt), he is forced to pay road crossing fees of 25 pounds (a dollar equals 51.75 pounds in banks) after it recently increased as he uses two roads that include “card kiosks.”
Fahmy told Asharq Al-Awsat that he resorts to using the regional ring road with fees of 10 pounds, before paying 15 pounds on the eastern Assiut road, as it is the fastest and closest to his village. He pointed out that he was surprised by the increase in road fees from 10 to 15 pounds for the last trip he made with his family during the summer vacation.
He points out that the central route shortened several routes for him, which he had to take when he wanted to travel via the eastern route. Even with the length of the route compared to the other routes he was taking, which took longer and passed through streets suffering from broken down, in return, he began to pay higher fees.
The Egyptian road network witnessed a significant expansion during the period from June 2014 to June 2026, with the implementation of 6,600 kilometers out of a planned 7,500 kilometers, bringing the length of the main road network to about 31,000 kilometers compared to 23.5 thousand kilometers in 2014, in addition to developing and raising the efficiency of 8,700 kilometers of old roads. 946 bridges and tunnels were also implemented, bringing the industrial works on main roads to 2,500 compared to 1,500 in 2014, and 19 new axes were constructed on the Nile, with the completion of raising the efficiency of 38,000 kilometers of local roads in the governorates, according to a previous statement by the Egyptian Ministry of Transport.
Some travelers consider the “card” an additional burden when traveling outside Cairo, such as Saeed Safwat, who frequents the northern coast on a weekly basis during the summer due to the nature of his work in sound engineering for concerts. He now pays higher fees, as he paid 30 pounds in road fees, after they were 20 pounds until about mid-summer.
Safwat told Asharq Al-Awsat that he and his colleagues on their weekly trips were surprised by the doubling of road fees a few days after the announcement of raising the permitted speed on the road following the completion of development and expansion works for the lanes in which they travel in the distance from the Wadi Al-Natroun area until reaching Al-Alamein (northern Egypt).
Last month, increases in “card” fees were implemented on some roads, while other prices were maintained. Among the roads on which the increases were applied was Al-Alamein Road, on which the fees applied to were increased to 20 pounds instead of 10 pounds. Residents of a number of luxury residential complexes in Greater Cairo have become forced on a daily basis to pay the “card” back and forth to their homes on the outskirts of Cairo, or to make periodic subscriptions to pass through them during their movement to central Cairo. Some of them express annoyance at the payment and the long wait at the gates, especially since they are considered residents of Cairo.
Although Ahmed Farag, a dairy products distributor residing in Giza, praised the improvement of the road network, he expressed his dissatisfaction with the increase in the number of “card kiosks” on the roads leading to his hometown in Sharqia (Delta Egypt). He told Asharq Al-Awsat: “While a microbus carrying 14 passengers pays only 5 pounds (card) on the free (Banha-Shubra) road, I pay 15 pounds to ride in my car, which is a distance.” Not more than 40 kilometers. In the distance from Zagazig to Deir Negm, I pay 10 pounds on the new road again in a distance of about 20 kilometers. This means that I pay 25 pounds in road crossing fees in the distance from Cairo to my house in Sharqia.
Exploiting returns
On the other hand, the representative of the Transport and Communications Committee in the House of Representatives (Parliament), Mohamed Moselhi, told Asharq Al-Awsat, “Highway fees are something known globally and are not new in Egypt. They began to be applied decades ago on highways, and their revenues are used to develop roads and maintain their safety.”
He pointed out that “the past years have witnessed an unprecedented and historical expansion in the construction of roads and bridges with standard specifications that facilitated the movement of citizens, and in a way that also serves the commercial movement in transporting goods to and from different regions.”
Moselhi added that “the increases that occur in fees are not significant in light of the multiple maintenance that roads require periodically to maintain them,” noting that “the road leading to the northern coast, which was expanded and lanes were allocated for heavy transport vehicles, and then allowed to increase the speed on it for private cars, witnesses its peak traffic over the course of only 3 months, while the rest of the year traffic on it is limited, but this does not prevent carrying out periodic maintenance at the same cost as similar roads that witness heavy traffic throughout the year.” "General".
Egypt has achieved great progress in classifying road quality globally. It moved from 118th place in 2014 to 28th place in 2019, then 18th place in 2024, an increase of about 100 places in 10 years, according to statements by officials of the Egyptian Ministry of Transport.
Urban planning professor Saif El-Din Faraj attributes the discrepancy in fees for some roads to the intensity of their use or the maintenance they require, pointing out that “the New Alamein Road operates intensively only for about 3 months a year, while it requires periodic maintenance to maintain its efficiency throughout the year, which imposes an increase in the cost of its use. The same also applies to the Jabal Al-Jalala Road, which is located in the middle of a mountainous area, and the cost of its maintenance increases significantly compared to regular roads.”
Faraj added to Asharq Al-Awsat that “the idea of the state moving from merely expanding the construction of roads to maintaining the sustainability of new roads makes it commit to implementing periodic road maintenance on an ongoing basis, which costs millions of pounds in addition to the fees that are paid,” pointing out that “the increase in global prices has affected the cost of maintaining and constructing new roads, and the rates of increase that have been implemented recently are much less than what is spent annually on roads,” as he put it.
