Gold Closes at $4,165 per Ounce Amid Anticipation of US Economic Data

Kuwait, Oct 18 (KUNA) -- Gold prices ended last week’s trading with a slight improvement at $4,165 per ounce, amid anticipation of U.S. economic data, particularly inflation figures and interest rate decisions, following a limited recovery from a sell-off that had brought the precious metal close to the $4,000 level.

In a report issued on Sunday, Kuwait’s Dar Al-Suqour company stated that gold’s recovery has not alleviated the pressures facing the metal, as concerns over U.S. inflation and the likelihood of tighter monetary policy persist in the coming months. The report added that gold enters a new week of trading amid ongoing uncertainty in global markets, with investors awaiting key U.S. economic data and assessing the Federal Reserve’s monetary policy trajectory.

The report clarified that gold’s movement is influenced by a mix of factors, including inflation, interest rates, dollar movements, Treasury bond yields, geopolitical risks, and stock market volatility.

It noted that U.S. economic indicators showed mixed results. The Consumer Price Index rose by 7.3% year-on-year in September, compared to 3.4% in August, surpassing market expectations of 3.6%. Meanwhile, the Producer Price Index increased by 6.3% year-on-year, exceeding forecasts and reinforcing fears of persistent inflationary pressures and the difficulty of returning inflation to target levels in the near term.

The report pointed out that market bets on a U.S. interest rate hike during the October meeting have declined, with investor attention shifting to the December meeting and the possibility of additional steps to combat inflation if price pressures continue. It emphasized that this divergence reflects market caution: holding interest rates steady in the short term could support gold prices, while continued expectations of future hikes may limit opportunities for sustained gains.

The report stated that geopolitical developments in the Middle East and the war in Ukraine remain key factors influencing market movements, with ongoing concerns about maritime security and global energy supplies. Rising tensions could boost demand for gold as a hedge during periods of uncertainty, while higher oil prices resulting from supply disruptions could intensify inflationary pressures and prompt central banks to keep interest rates elevated for longer.

This situation creates a dual impact of geopolitical developments on gold: supporting safe-haven demand while increasing the likelihood of continued tight monetary policy.

The report added that markets are also monitoring the performance of technology and artificial intelligence stocks, as major companies—including Meta, Tesla, and Netflix—accelerate their earnings announcements. The results and future outlooks of these companies could influence investor risk appetite; declining confidence in growth stocks may increase demand for safe-haven assets, while strong results could support equity inflows and reduce some investment flows into gold.

Furthermore, the report indicated that investors’ focus this week, from October 19 to 23, will be on U.S. housing data, initial jobless claims, and preliminary purchasing managers’ indices (PMIs), which will provide early signals regarding the performance of the U.S. economy and activity trends in the manufacturing and services sectors.

The report noted that the results of these data will influence investors’ expectations regarding the trajectory of U.S. interest rates, as sustained economic strength alongside rising inflation could bolster the likelihood of monetary tightening, supporting the dollar and bond yields, which may in turn pressure gold. From a technical perspective, the report stated that gold faces the $4,200-per-ounce level as a major resistance barrier; breaking through and holding above it could enhance the chances of a move toward $4,242, then $4,331, before reaching $4,500 per ounce, provided buying momentum improves and supportive factors persist. It added that the $4,150 level represents initial support, while $4,100 constitutes a key support zone; a break below it could lead to a test of $4,050 and then $4,000 per ounce. The report pointed out that these levels reflect gold’s continued sensitivity to changes in interest rate expectations, dollar movements, and yields, with the possibility of range-bound trading remaining until clearer economic or geopolitical catalysts emerge. It clarified that the price’s success in surpassing key resistance levels will remain tied to a sustained return of buying momentum, rather than temporary rallies during trading sessions. The report affirmed that gold enters the new week amid conflicting factors, including safe-haven demand support versus risks from persistent inflation and monetary tightening, with U.S. economic data, yield and dollar movements, and geopolitical developments set to be the primary determinants of its direction in the coming days. It added that a price decline could offer an opportunity for buying to resume, but sustained upside will require clearer improvement in supportive factors, given that the prospect of monetary tightening remains one of the main challenges to achieving lasting gains. On the local front, the report said gold prices continue to be influenced by global ounce movements, with the price of 24-karat gold reaching around 42 Kuwaiti dinars per gram (approximately $136), while 22-karat gold recorded about 38.500 dinars per gram (approximately $124), and the price of a kilogram of silver stood at around 632 dinars (approximately $2,050). (End) S.M.R./H.T.