Gold closes last week's trading at $4,348 per ounce

Gold prices ended last week’s trading with relative stability, closing Friday’s session 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 today by Kuwait’s Dar Al-Suqook 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 supported by declining bond yields and the fading of the initial strong reaction of the US dollar.

The report added that movements in yields and the dollar remain among the key factors determining the direction of the precious metal, especially with the upcoming Federal Reserve meeting.

It clarified that US Consumer Price Index data showed inflation rose by 0.4% on a monthly basis in August and by 3.4% on an annual basis, with both readings in line with market expectations.

It noted that core inflation rose by 0.3% monthly, surpassing expectations of 0.2%, while the annual rate declined to 2.4%, consistent with estimates.

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

The report pointed out that rising rate hike expectations did not prevent gold from recovering some gains as bond yields fell during Friday’s trading.

It added that the dollar index stabilized near the 99-point level, while the yield on the 10-year US Treasury bond dropped 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.

It noted that markets are also awaiting a range of economic data, including retail sales, industrial production, labor market data, and housing figures, alongside statements from Federal Reserve officials.

The report mentioned that geopolitical developments and energy prices will remain important factors for gold, particularly with ongoing tensions in the Middle East and concerns related to energy supplies.

It explained that rising oil prices could increase inflationary pressures, potentially affecting interest rate expectations. Consequently, escalating geopolitical risks could boost demand for gold as a safe-haven asset.

From a technical perspective, the Dar Al-Suqook report stated that gold ended the week at $4,348 per ounce, keeping the $4,400 level as the key resistance in the current phase. It clarified that if gold manages to break through this level and hold above it, attention may shift to $4,450, then $4,500, followed by the level of approximately $4,538.

It added that if the $4,348 level breaks and selling pressure continues, prices may test the $4,300 level, then $4,282, which represents important technical support. A break below this level could pave the way for further correction toward lower levels.

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 changing expectations of US monetary policy.

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