Gold ends the week at $4,054
Gold prices ended last week’s trading at $4,054 per ounce, posting modest weekly gains after recovering from the previous session’s losses. This occurred amid continued market anticipation as geopolitical tensions in the Middle East escalated and global energy prices rose.
According to a report issued today by Dar Al Sabeek Kuwait, the precious metal continued to trade under clear pressure despite its closing gains, driven by growing expectations that interest rates will remain at elevated levels for a longer period. This outlook reduces the appeal of gold as a non-yielding asset. The report clarified that gold had experienced notable declines in recent months since the outbreak of confrontations between the United States and Iran. This downturn resulted from investors shifting their focus toward the inflationary effects of rising oil prices rather than seeking safe-haven assets like gold. Fears of rising inflation have reinforced expectations that central banks will maintain tight monetary policies.
The report added that gold prices stabilized at the end of the week near levels ranging between $4,050 and $4,065 per ounce, following a drop of approximately 2% in the previous session. Investors were balancing the impact of geopolitical tensions, rising oil prices, and expectations regarding US monetary policy. It noted that attention remains focused on the upcoming meeting of the US Federal Reserve (the central bank). While expectations point to interest rates remaining unchanged, markets still anticipate the possibility of another rate hike in the coming months if inflationary pressures persist.
The report highlighted that rising oil prices were the most influential factor in market movements last week, fueled by ongoing tensions in the Middle East and fears of supply disruptions. It pointed out that sustained increases in energy prices lead to higher production and transportation costs, which may compel central banks to maintain their tight monetary policies for a longer duration.
Furthermore, the report noted that persistently high US interest rates have led to increased yields on US Treasury bonds and continued strength in the US dollar. This also raises the cost of holding gold compared to assets that generate returns.
It stated that the US dollar continued to gain ground last week, while US Treasury bond yields declined modestly, providing some support for gold prices and limiting its losses. The report explained that the $4,000 per ounce level represents the most significant psychological support, followed by $3,941 and then $3,886. The $3,500 level serves as a major long-term support, while $4,100 per ounce constitutes the first significant resistance, followed by $4,165 and then $4,200. It emphasized that breaking through these levels is essential to improve the technical picture and restore an upward trend.
On the local front, the report stated that prices of precious metals continued to be influenced by global movements. The price of 24-karat gold per gram reached approximately 0.40800 Kuwaiti dinars (about $132), while 22-karat gold per gram recorded around 0.37400 dinars (approximately $121). Meanwhile, the price of a kilogram of silver reached about 0.684 dinars (approximately $2,222).
