Gold closes last week’s trading at $4,378 per ounce, benefiting from the decline in oil prices

Gold prices ended last week’s trading session higher, closing at $4,378 per ounce, marking its first weekly gain in four weeks. The rise was supported by falling oil prices and easing concerns about persistent inflationary pressures, as markets awaited key U.S. economic data.

According to a report issued today by Kuwait Mint Company, markets continued to assess the implications of the U.S. Federal Reserve’s (the central bank) decision to raise interest rates, alongside movements in the U.S. dollar and Treasury bond yields.

The report noted that gold experienced notable fluctuations last week after facing strong selling pressure following the Fed’s 25-basis-point rate hike. However, it recovered part of its losses as oil prices fell and bond yields declined, helping to alleviate pressure on the precious metal.

It added that geopolitical tensions in the Middle East continued to support demand for gold, as investors seek safe-haven assets amid heightened uncertainty.

The report stated that the Federal Reserve raised its benchmark interest rate to a range of 3.75% to 4.0%, with continued signals suggesting further increases could be implemented in the coming months.

Market trading currently prices in approximately a 55% probability of another rate hike at the next meeting in October, making statements from Federal Reserve officials and upcoming economic data among the most influential factors driving gold’s movement.

The report noted that the yield on the 10-year U.S. Treasury bond approached the 5% level, a high that increases the opportunity cost of holding gold, which yields no return.

It added that any decline in bond yields could provide additional support for the precious metal, particularly if accompanied by a weaker U.S. dollar.

The dollar remained strong last week, bolstered by expectations of continued monetary tightening, which limited gold’s ability to post larger gains. Nevertheless, the precious metal managed to secure a weekly rise, supported by falling oil prices and ongoing geopolitical uncertainty.

The direction of oil prices remains a key factor for gold, as rising oil prices could reignite inflationary pressures and reinforce expectations that interest rates will remain elevated for longer. Conversely, sustained declines in oil prices could help ease such pressures.

Markets are now focused on a series of important U.S. economic data releases this week, led by the September preliminary Purchasing Managers’ Index (PMI) figures, which will provide early indicators of economic activity in the manufacturing and services sectors.

Markets are also awaiting weekly jobless claims data and new home sales figures, alongside comments from several Federal Reserve officials, which may offer further signals regarding the future direction of monetary policy following the recent rate hike.

Investors will closely monitor statements from U.S. central bank officials to determine whether they favor continued monetary tightening or see room for a pause, given developments in inflation and economic activity.

Finally, attention is turning to the anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping, as ongoing issues related to trade, technology, artificial intelligence, and supply chains continue to impact global markets.

A report by Dar Al Sibaak emphasized that any new developments in trade relations between the world’s two largest economies could trigger movements in the dollar, commodities, and financial markets.

It stressed that geopolitical developments in the Middle East and energy prices will remain key factors influencing gold prices in the coming period, as escalating tensions could boost demand for the precious metal as a safe-haven asset.

Technically, the report noted that gold ended the week at $4,378 per ounce, with the $4,400 level remaining a significant resistance zone in the current phase.

It clarified that if gold manages to break through and hold above this level, attention may shift to the $4,450 and then $4,500 levels, followed by the approximately $4,538 mark.

It added that if selling pressure returns and the $4,378 level is broken, prices could move to test the $4,300 level, then the $4,282 level, which represents important technical support.

It noted that a break below the $4,282 level could extend the correction wave to lower levels, with dollar movements and bond yields remaining among the most prominent factors determining trend strength.

On the local front, the Dar Al Sibaak report stated that gold prices continue to be directly influenced by global ounce movements, alongside dollar fluctuations and shifting expectations of U.S. monetary policy. The price of 24-karat gold per gram reached approximately 4.59 Kuwaiti dinars (around $141), while 22-karat gold recorded around 3.96 dinars (approximately $130). Meanwhile, the price of a kilogram of silver stood at around 715 dinars (roughly $2,326).

The ounce is a unit of mass used in various measurement systems, also known as the avoirdupois ounce, and equals 28.349 grams. When used as a unit of measurement for precious metals, it equals 31.103 grams.