3% Weekly Loss for Gold, First After 21 Days of Gains
(KUNA) – Gold prices ended last week’s trading with a sharp decline, recording its first weekly loss after three consecutive weeks of gains, as it closed on Friday at $4,454 per ounce, down more than 3 percent on a weekly basis.
A report issued by Dar Al-Sobah Kuwait on Sunday stated that the decline followed a shift in US monetary policy expectations after comments by US Federal Reserve Chair Kevin Warsh, which took a tougher stance on inflation, prompting investors to increase their bets on a potential US interest rate hike in September.
The report clarified that Warsh’s speech marked the main turning point in gold’s movement, as he confirmed that core inflation has not declined sufficiently over recent months, adding that the Federal Reserve still has work to do if policymakers are not convinced that inflation is clearly moving toward the central bank’s 2 percent target.
The report noted that the dollar index rose last week against other major currencies, increasing pressure on dollar-denominated gold and making the metal more expensive for buyers holding other currencies.
It pointed out that despite the decline, gold continues to benefit from supporting factors in the medium and long term, most notably concerns regarding US public finances and rising debt levels, alongside geopolitical risks and sustained investment demand for precious metals. It explained that concerns over US debt and financial instability remain supportive factors for gold in the long run.
From a technical perspective, the Dar Al-Sobah report stated that gold fell below its 200-day moving average near $4,526 per ounce, signaling the market’s entry into a deeper correction phase following the previous upward surge.
It noted that the $4,450 level will remain the key pivot point during the week, as holding it could allow gold to attempt to regain the $4,500 level, followed by the $4,520 and $4,526 areas.
It added that a break below $4,450 and sustained trading underneath could increase the risk of a decline toward $4,380, while a return above $4,550 would provide a more positive signal indicating the end of the correction wave and the return of buyers to the market. It viewed the recent drop as having pushed momentum indicators into oversold levels, potentially opening the door for a technical rebound if yields fall or the dollar weakens.
On the geopolitical front, the report clarified that developments in the Middle East, Iran, and the Strait of Hormuz will remain influential factors in demand for safe-haven assets, while oil prices will remain under close watch due to their direct impact on US inflation expectations and monetary policy.
It emphasized that gold enters the new week after a strong correction exceeding 3 percent under pressure from the rising dollar, yields, and repricing of US interest rate expectations, but oversold conditions may provide an opportunity for a technical rebound. It clarified that US jobs data will be the main driver of prices, while the $4,450 to $4,500 range will remain the decisive zone in the coming period.
On the local front, the Dar Al-Sobah report stated that gold prices in the Kuwaiti market continue to be directly affected by global ounce movements, alongside dollar fluctuations and changes in US monetary policy expectations.
It indicated that the price of 24-karat gold per gram reached approximately 315.44 dinars, while 22-karat gold recorded around 620.40 dinars, and the price of a kilogram of silver stood at approximately 716 dinars.
