$4,400: The Most Prominent Resistance Barrier for Gold

Gold prices ended last week’s trading with relative stability, closing Friday’s session at around $4,348 per ounce, registering a weekly loss as markets awaited the US Federal Reserve’s decision on interest rates.

A specialized report noted that gold experienced notable fluctuations last week, coming under pressure following the release of US inflation data, before recovering part of its losses supported by declining bond yields and the fading of the initial strong reaction in the US dollar.

The report added that movements in yields and the dollar remain among the key factors determining the direction of the precious metal, especially with the upcoming Federal Reserve meeting.

It clarified that US Consumer Price Index data showed inflation rising by 0.4% month-on-month in August, and by 3.4% year-on-year, with both readings in line with market expectations.

The report mentioned that core inflation rose by 0.3% monthly, surpassing expectations of 0.2%, while the annual rate declined to 2.4%, consistent with estimates.

It added that the US Dollar Index stabilized near the 99-point level, while the yield on the 10-year US Treasury bond fell by approximately one basis point to around 4.85%, providing some support for gold, as lower yields reduce the opportunity cost of holding the non-yielding metal.

The report stated that markets are also awaiting a range of economic data, including retail sales, industrial production, labor market data, and housing data, alongside comments from Federal Reserve officials.

The report noted that geopolitical developments and energy prices will remain important factors for gold, particularly with ongoing tensions in the Middle East and concerns related to energy supplies.

It explained that rising oil prices could increase inflationary pressures, potentially affecting interest rate expectations, while escalating geopolitical risks could boost demand for gold as a safe-haven asset.

Technically, the report said gold ended the week at $4,348 per ounce, keeping the $4,400 level as the key resistance in the current phase. It clarified that if gold manages to break through this level and sustain it above, attention may shift to $4,450 and then $4,500, followed by a level around $4,538.

It added that if the $4,348 level breaks and selling pressure continues, prices may test the $4,300 level and then $4,282, which represents significant technical support. A break below this level could pave the way for further correction toward lower levels.

On the local front, the report mentioned that gold prices in the Kuwaiti market continue to be directly influenced by global ounce movements. It indicated that the price of 24-karat gold per gram reached approximately 43.230 dinars (around $140), while 22-karat gold recorded around 39 dinars (approximately $129). The price of a kilogram of silver stood at around 698 dinars (approximately $2,276).