Gold records best weekly performance since January

Gold prices ended last week’s trading with a strong rally, posting its best weekly performance since January and closing at $4,342 per ounce, the highest level since June 17, supported by weak U.S. labor market data and ongoing geopolitical uncertainty in the Middle East.

According to a specialized report issued by Dar Al Sobaik, the precious metal rose more than 7% last week, benefiting from a noticeable shift in market expectations regarding U.S. monetary policy. This shift followed a series of economic data points indicating a slowdown in the labor market, reinforcing the belief that the Federal Reserve may delay any further steps to tighten monetary policy in the coming months.

The report highlighted that the most prominent event of the week was the release of the U.S. non-farm payrolls report, which came in below market expectations. The data showed that the U.S. economy lost 23,000 jobs in July, whereas forecasts had anticipated the addition of approximately 80,000 jobs.

It added that data for May and June saw significant downward revisions, with previously reported total jobs being reduced by approximately 103,000, confirming that the U.S. labor market is slowing at a faster pace than expected.

These data points led to a sharp decline in expectations for U.S. interest rate hikes. The probability of the Federal Reserve raising rates at its September meeting dropped significantly, and markets increasingly leaned toward holding interest rates steady, particularly as pressures from the labor market eased.

The report clarified that the U.S. Dollar Index fell by approximately 99 points against other major currencies, reaching its lowest level in nearly two months. This decline enhanced gold’s appeal as a non-yielding asset, which typically benefits from falling interest rates and a weaker dollar.

On the local front, the gains achieved by precious metals in global markets were reflected in prices in the Kuwaiti market. The price of 24-karat gold reached approximately 43.44 dinars per gram (about $141), while 22-karat gold recorded around 39.82 dinars per gram (about $129).

The report noted that the price of a kilogram of silver reached approximately 726 dinars (about $2,357), as the local market continued to be influenced by global price movements, dollar fluctuations, and changing expectations regarding U.S. monetary policy.