Gold opens purchase window... with a bet on historic rise

Ali Ibrahim: Two economic experts predict continued downward pressure on gold prices in the coming period, amid a combination of economic and political factors driving investors to redistribute liquidity among investment assets, with expectations that the ounce could reach levels between $3,600 and $3,820 before resuming its upward trend.

In separate statements to Al-Anbaa, the experts noted that the current downturn represents a price correction following previous record highs, anticipating that the price decline will pave the way for a new phase of gradual buying and position building, reaching $6,400 per ounce by 2027.

Initially, certified market analyst and trainer Faisal Waleed Al-Jassim said gold prices experienced one of the strongest correction waves during last Friday’s session, after falling to $3,885 per ounce in a free-fall move reflecting widespread profit-taking by speculators and investors who benefited from previous record highs.

Al-Jassim clarified that the magnitude of the decline over a short period reflects intense selling pressure and the rapid exit of liquidity from the precious metal, noting that the move was not driven by a single factor but resulted from the convergence of several economic and financial variables that enhanced the attractiveness of the US dollar at the expense of gold.

He added that Friday’s session saw a notable strengthening of the US dollar, coinciding with rising yields on US Treasury bonds, as well as oil prices climbing to $105, factors that contributed to shifting investor sentiment and redistributing liquidity across different markets and investment assets.

He pointed out that the US Federal Reserve’s decision to keep interest rates unchanged during its meeting last Wednesday was among the factors monitored by markets, amid ongoing uncertainty regarding the US monetary policy path. He explained that higher yields on US debt instruments increase the opportunity cost of holding gold, as it is an asset that does not generate periodic returns.

He noted that attention is currently focused on the US midterm elections and potential changes in the political landscape, alongside possibilities of military escalation in the region. These developments could raise market volatility levels and push speculators to continue taking profits, while boosting demand for the dollar during certain trading phases.

Regarding investors in Kuwait, he clarified that a segment of traders bought gold bars at high price levels, when the price of a kilogram of gold exceeded 50,000 dinars, emphasizing that losses resulting from the current decline remain unrealized paper losses as long as the bars have not been sold.

He advised gold holders to maintain their positions and avoid rushing to sell under pressure from current declines, considering the ongoing correction a natural movement following an exceptional rally that followed the coronavirus pandemic. He estimated that the targeted correction could reach 25% to 30% of the gains from that rally.

He affirmed that his long-term outlook for gold remains positive, noting that the fair price for the ounce exceeds $6,300 according to reports from the World Gold Council and several banks. He also expected the price of a gram of gold in Kuwait to reach approximately 63 dinars after the war ends, compared to current levels of around 38 dinars, considering that selling should be linked to actual liquidity needs rather than temporary price declines.

Regarding current investment opportunities, Al-Jassim considered that current price levels offer a chance to rebuild positions, especially

For those who were unable to purchase during previous waves, he emphasized the importance of spreading purchases across a range of price levels, rather than investing all available liquidity at a single level, which helps lower the average purchase cost and improves the ability to manage potential fluctuations in the coming period.

Geopolitical indicators

For his part, economic consumer behavior expert Salah Al-Jemaim said that the sharp decline in gold prices during last Friday’s trading sessions, which broke the $4,000-per-ounce barrier to reach $3,885, resulted from a combination of political, economic, and investment factors. He noted that this drop was not unexpected given the changes occurring in the international arena.

He explained that markets began reacting to signs of political and geopolitical de-escalation, particularly with diplomatic moves and international visits led by several politicians aimed at containing tensions and reducing the intensity of military events. This coincided with the approaching midterm elections in the United States, which strengthened expectations that geopolitical risks—which had been one of the main drivers of gold demand in recent periods—would recede.

He added that the decision to keep interest rates unchanged, along with changing investor expectations regarding market trajectories in the near future, contributed to a reallocation of investments within financial portfolios. Some investors moved to reduce their exposure to gold and directed liquidity toward other investment instruments and assets. He pointed out that the approach of the end of 2026 represents an additional factor in this shift, as investment institutions reassess their financial positions and review their investments based on annual results and growth forecasts.

He noted that improved financial conditions for companies, positive earnings results, and better profitability and cash flow indicators may enhance the attractiveness of stocks and company-linked assets, prompting investors to diversify their portfolios and seek opportunities offering better returns, especially given the previous highs in gold prices.

Al-Jemaim predicted continued downward pressure on the yellow metal over the next two months, forecasting that the ounce price could fall to levels between $3,820 and $3,600. He considered the $3,600 zone as a potential price stabilization level before entering a new phase of recovery and resuming an upward trend starting in February 2027.

He clarified that mid-December 2026 could mark the beginning of a new phase of gradual buying and building investment positions, with investors awaiting lower price levels as opportunities to re-enter the market. He further predicted that the upward wave would reach a profit-taking stage in October 2027, forecasting gold to reach $6,400 next year.

He warned of the possibility of a significant price correction for gold in 2028, amid shifting investment cycles and liquidity movements across different assets. He stressed the importance of monitoring geopolitical developments, monetary policies, and the performance of global financial markets, as these are key factors in determining the direction of the yellow metal in the coming years.