Gold at $4,348 Amid Anticipation of Interest Rate Decision

Gold prices ended last week’s trading with relative stability, closing at around $4,348 per ounce, marking a weekly loss as markets awaited the US Federal Reserve’s decision on interest rates. A report issued by Dar Al Sabaik 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 dollar reaction.

The report added that movements in yields and the dollar remain among the key factors determining the precious metal’s direction, especially with the Federal Reserve meeting approaching. 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 shifts in US monetary policy expectations.

It specified that the price of 24-karat gold reached approximately 4.230 Kuwaiti dinars (about $140), while 22-karat gold stood at around 3.900 dinars (about $129), and the price of a kilogram of silver reached about 6.980 dinars (approximately $2,276).

The report clarified that US Consumer Price Index data showed inflation rose by 0.4% month-on-month in August and by 3.4% year-on-year, with both readings in line with market expectations. Core inflation increased by 0.3% month-on-month, exceeding the expected 0.2%, while the annual rate declined to 2.4%, consistent with estimates.

The data reinforced market expectations of continued tight monetary policy, raising the probability of a Federal Reserve rate hike at its next meeting to around 85%, up from about 72% prior to the data release.

The report noted that rising rate-hike expectations did not prevent gold from recovering some gains, supported by falling bond yields. 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%, 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, as well as statements from Federal Reserve officials.