"Sibaik": Gold on track to reach $4,800 per ounce

Sabaik Kuwait, a leading gold refiner, has forecast continued upward momentum for gold in the coming period, with the precious metal potentially targeting $4,800 per ounce next month. This outlook is supported by a weakening US dollar, a resurgence of investment flows into gold-backed exchange-traded funds (ETFs), and sustained central bank purchases, provided that the markets do not experience fundamental surprises from the US Federal Reserve or sharp fluctuations in oil prices.

Mohamed Salah, Head of Operations at Sabaik, told Al Arabiya channel that gold recorded gains last week, benefiting from the weakness of the US currency. He explained that measures taken by the US Treasury to support the bond market helped curb US Treasury yields, which negatively impacted the dollar’s strength and provided additional support for gold. Salah clarified that gold had already begun its upward trajectory prior to these measures, driven by the return of flows into gold-backed ETFs—a development representing a key signal investors had been awaiting to assess the direction of the precious metal in the near future.

Regarding price trends, Salah projected that gold could reach $4,800 per ounce next month, barring any fundamental changes related to oil prices or US monetary policy. He emphasized that these forecasts represent a market trend analysis and not a buy recommendation. He noted that earlier data from the World Gold Council showed outflows from ETFs in North America and Asia during the second quarter; however, this did not prevent sustained high demand for gold, bolstered by strong central bank purchases in the market.

According to Salah, central banks purchased 289 tonnes of gold in the second quarter, marking a significant increase compared to first-quarter levels after data revisions. This reflects continued official demand for gold and its role within central bank reserves.

On the technical front, Salah pointed out that gold has tested the $4,000 per ounce support level multiple times and managed to hold above it, reinforcing the significance of this level in market trend analysis. He believes the likelihood of a return to this level is now remote under current conditions.

Salah explained that a further decline in gold to the $4,000 level could be linked to major and unexpected market shifts, primarily the US Federal Reserve raising interest rates or oil prices surging beyond $110 per barrel. He confirmed that markets are currently pricing in a scenario of stable US interest rates, which reduces the probability of gold facing significant pressure in the near term.