Gold recovers gains, closes at $4,071 per ounce amid declining market risks

Kuwait - Gold prices recovered some of their gains during last week’s trading sessions, closing at $4,071 per ounce following a decline in market risks and a return of buying activity to its previous momentum, which helped the precious metal rebound after a previous correction wave. A report issued today by Kuwait’s Dar Al-Sabaik stated that gold’s performance was supported by renewed buying at lower levels and improved investment demand for precious metals, alongside ongoing uncertainty regarding global economic developments, US monetary policy, and geopolitical risks.

The report noted that last week’s trading saw notable volatility, with gold rising during Thursday’s session to levels exceeding $4,140 per ounce before retreating on Friday amid a stronger US dollar and higher Treasury yields, ending the week at $4,071. It added that despite the price decline in the final session, the recovery above the $4,000 level reflects an improvement in buying momentum compared to the previous week, with markets remaining sensitive to US economic data and interest rate expectations.

The report stated that markets are entering the current week anticipating a series of key economic indicators, led by the US Consumer Price Index for October, scheduled for release on Tuesday, followed by the Producer Price Index on Friday, alongside weekly jobless claims data and statements from US Federal Reserve officials. It highlighted that inflation data is particularly significant following the strong jobs report, as continued price increases could reinforce expectations that interest rates will remain elevated for longer or increase the likelihood of a rate hike at the December meeting.

Dar Al-Sabaik’s report indicated that a clear slowdown in inflation could, conversely, ease pressure on the US dollar and bond yields, giving gold an opportunity to maintain its gains and complete its recovery, especially after returning to trade above the $4,000 level. It noted that markets will also monitor statements from Federal Reserve officials in search of additional signals regarding their assessment of inflation, labor market strength, and potential monetary policy directions.

The report mentioned that the US Dollar Index regained the 102-point level following the release of jobs data, coinciding with rising Treasury yields, which pressured gold prices during Friday’s session. It pointed out that the relationship between the dollar and yields will remain among the most influential factors affecting the precious metal’s movement, as continued rises could limit upside opportunities, while declines could stimulate investment demand for gold and silver.

It explained that geopolitical developments in the Middle East and risks to oil supplies and maritime navigation will remain key factors in energy markets due to their potential impact on global inflation expectations. The report stated that markets continue to monitor the performance of technology stocks and companies linked to artificial intelligence, amid concerns over the valuations of major corporations, rising capital expenditure, and the resulting volatility in equity markets and shifts in risk appetite.

The report noted that silver also recorded gains last week, benefiting from the recovery in precious metal markets, while remaining influenced by movements in the US dollar and bond yields. It clarified that silver’s dual nature as both an investment and industrial metal means demand is linked to sectors such as solar energy, electronics, and technological applications.

The report noted that industrial activity indicators in China and major economies will remain key factors to monitor in the coming period, especially given the link between silver demand and global economic growth expectations. Technically, the report highlighted the $4,050-per-ounce zone as the first support level, followed by the $4,000 level, which represents a significant psychological and technical barrier. It added that if prices break below $4,000 and stabilize underneath, selling pressure could increase toward $3,940, then toward the $3,875 zone, which saw low trading volumes during the previous correction wave. Conversely, gold needs to reclaim the $4,100 level to bolster upward momentum, with the $4,115–$4,155 range representing an important resistance zone. The Bullion Desk report clarified that a breakout above this range and sustained trading above it could enhance the chances of testing the $4,200 level, and then $4,300, provided that supportive economic and financial factors for the metal continue to improve. On the local front, the price of 24-karat gold reached approximately 4.880 Kuwaiti dinars per gram (about $132), while 22-karat gold traded around 3.475 dinars (about $121). The price of a kilogram of silver stood at roughly 591 dinars (about $1,919), as local prices continued to be influenced by fluctuations in global markets. (End) S.M.R./H.T./N.W.F.