Gold Closes Last Week's Trading at $4,348 per Ounce Amid Anticipation of US Interest Rate Decision

Kuwait City, 13 September (KUNA) – Gold prices ended last week’s trading with relative stability, closing Friday’s session at around $4,348 per ounce, marking a weekly loss as markets awaited the US Federal Reserve’s decision on interest rates.

In a report issued on Sunday, Kuwaiti company Dar Al Sibaik stated that gold experienced notable fluctuations last week after coming under pressure following the release of US inflation data, before recovering part of its losses amid falling bond yields and a 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 rose by 0.4 percent on a monthly basis in August and by 3.4 percent on an annual basis, with both readings in line with market expectations. Core inflation rose by 0.3 percent on a monthly basis, surpassing expectations of 0.2 percent, while the annual rate fell to 2.4 percent, consistent with estimates.

The report noted that the inflation data strengthened market expectations of continued tight monetary policy, raising the probability of a rate hike by the Federal Reserve at its next meeting to around 85 percent, up from about 72 percent prior to the data release. It pointed out that rising rate hike expectations did not prevent gold from regaining some gains, supported by falling bond yields during Friday’s trading.

The dollar index stabilized near the 99-point level, while the yield on the 10-year US Treasury bond fell by about one basis point to approximately 4.85 percent, providing some support for gold, as lower yields reduce the opportunity cost of holding the non-yielding metal.

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

The report highlighted 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. Rising oil prices could increase inflationary pressures, potentially affecting interest rate expectations. Consequently, escalating geopolitical risks could boost demand for gold as a safe-haven asset.

From a technical perspective, Dar Al Sibaik’s report stated that gold ended the week at $4,348 per ounce, keeping the $4,400 level as the key resistance in the current phase. It explained that if gold manages to break above this level and sustain it, attention could shift to $4,450, then $4,500, followed by approximately $4,538.

Conversely, if the $4,348 level breaks and selling pressure continues, prices could test the $4,300 level, then $4,282, which represents a key technical support. A break below this level could pave the way for further corrections toward lower levels.

On the local front, the report noted that gold prices in the Kuwaiti market continue to be directly influenced by global ounce movements, alongside dollar fluctuations and changing expectations regarding US monetary policy. It specified that the price of 24-karat gold reached around 4.230 Kuwaiti dinars (approximately $140), while 22-karat gold was around 0.390 dinars (approximately $129). The price of a kilogram of silver stood at around 0.698 dinars (approximately $2,276). (End) S.M.R. / K.D.A.