Gold Drops to $4,142 After Volatile Moves
Gold prices ended last week’s trading session lower, closing at $4,142, marking a second consecutive week of losses amid rising US Treasury yields, which limited the precious metal’s ability to capitalize on weak US labor market data.
Kuwaiti bullion dealer Dar Al-Sabik reported in a statement issued today that gold experienced volatile movements last week. It attempted to reclaim the $4,200 per ounce level but failed to sustain gains above it, closing the week lower amid persistent pressure from rising US yields.
The report noted that gold’s decline occurred despite weaker-than-expected US jobs data. The non-farm payrolls report showed the US economy added only 29,000 jobs in September, compared to expectations of around 90,000, while the unemployment rate rose to 4.2% from 4.1%.
It added that these figures bolstered market expectations that the Federal Reserve would keep interest rates unchanged at its next meeting. However, rising Treasury yields limited the impact of the weak data on the US dollar and gold prices.
The report pointed out that despite the weak labor market data, US yields remained at elevated levels, prompting investors to reassess their expectations regarding the monetary policy path in the coming months, particularly given ongoing inflation concerns.
The report stated that the Federal Reserve had raised interest rates in September by 25 basis points to a range of 3.75% to 4.0%, while markets are now awaiting new signals that could determine the direction of monetary policy in upcoming meetings.
It added that the US dollar continued to influence gold’s movement, as a stronger US currency makes the precious metal more expensive for investors using other currencies, potentially limiting demand.
The report noted that markets are also monitoring oil and energy price movements and their impact on inflation rates. Rising energy prices are seen as a factor that could reignite inflationary pressures and affect interest rate expectations, while a decline could give central banks more room to ease monetary policy.
It highlighted that geopolitical developments in the Middle East remained a key driver of market movements, with investors continuing to turn to gold as a hedge asset during periods of heightened uncertainty.
The report clarified that investor attention this week is focused on a range of US economic data and events, including a services sector index, the Federal Open Market Committee meeting minutes, statements by Federal Reserve officials, and consumer confidence data.
It explained that these data points are particularly significant following the weak jobs report, as new indicators will help determine the extent to which the labor market slowdown affects US monetary policy expectations.
The report noted that if data show continued economic strength and rising inflationary pressures, bond yields and the dollar may remain headwinds for gold. Conversely, further signs of economic slowdown could support expectations of stable or lower interest rates, which would provide support for the precious metal.
From a technical perspective, the report stated that the $4,200 per ounce level remains a significant barrier to recovery, after gold failed to sustain trading above it during last week’s sessions.
He clarified that if prices manage to reclaim the $4,200 level and hold above it, attention may shift to higher resistance levels, with nearby support zones concentrated at $4,100, followed by the $4,000 mark, which represents a significant psychological and technical barrier.
On the local front, the report stated that the price of 24-karat gold per gram reached approximately 41.460 dinars (about $134), while 22-karat gold was recorded at around 38 dinars (about $123). Meanwhile, the price of a kilogram of silver stood at roughly 657 dinars (approximately $2,133).
