Gold Closes Last Week's Trading at $4,378 per Ounce

Gold prices ended last week’s trading on an upward note, closing at $4,378 per ounce, marking its first weekly gain in four weeks. This rise was supported by falling oil prices and easing concerns about persistent inflationary pressures, as markets awaited US economic data.

According to a report issued by Kuwait Mint Company on Sunday, markets continued to assess the implications of the US Federal Reserve’s decision to raise interest rates, alongside movements in the US dollar and Treasury bond yields.

The report clarified that gold experienced notable fluctuations last week after facing strong pressure following the Fed’s decision to raise interest rates by 25 basis points. 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 contributed to sustained demand for gold as investors seek safe-haven assets during periods of heightened uncertainty.

The report noted that the Federal Reserve raised interest rates to a range of 3.75% to 4.0%, with continued signals suggesting potential further increases in the coming period.

It pointed out that financial market trading currently prices in approximately a 55% probability of another interest rate hike at the next meeting in October, making statements from Federal Reserve officials and upcoming economic data among the most influential factors affecting gold’s movement.

The report stated that the yield on the 10-year US Treasury bond approached the 5% level, a high that increases the opportunity cost of holding gold, which generates no yield. It added that any decline in bond yields could provide additional support for the precious metal, especially if accompanied by a drop in the US dollar.

It noted that the dollar remained strong last week, supported by expectations of continued monetary tightening, which limited gold’s ability to achieve larger gains. However, the precious metal managed to post a weekly increase, supported by falling oil prices and ongoing geopolitical uncertainty.

It highlighted that the trend in oil prices remains a key factor for gold, as rising oil prices could reignite inflationary pressures and reinforce expectations that interest rates will remain high for longer, while continued declines in oil prices could help ease those pressures.

It clarified that market attention this week is focused on a set of important US economic data, primarily the preliminary September Purchasing Managers’ Index (PMI) indicators, which will provide early signs of economic activity performance in the industrial and services sectors.

It added that markets are also awaiting weekly jobless claims data and new home sales figures, alongside statements from several Federal Reserve officials that may offer further signals regarding the future of monetary policy following the recent rate hike decision.

It noted that investors will monitor statements from US central bank officials to determine whether they lean toward continuing monetary tightening or see room for a pause amid developments in inflation and economic activity.

It clarified that investors are anticipating an upcoming meeting between US President Donald Trump and Chinese President Xi Jinping, given the ongoing impact of issues related to trade, technology, artificial intelligence, and supply chains on global markets.

The (Kuwait Mint) report emphasized that any new developments in trade relations between the world’s two largest economies could lead to 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.

From a technical perspective, the report stated that gold ended the week at $4,378 per ounce, while the $4,400 level remains a key resistance area in the current phase. It explained that if gold manages to break through and hold above this level, attention may shift to $4,450, then $4,500, followed by approximately $4,538.

It added that if selling pressure returns and the $4,378 level breaks, prices may test $4,300, then $4,282, which represents a key technical support level.

It noted that a break below $4,282 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 (Kuwait Mint) report stated that gold prices continue to be directly influenced by global ounce movements, alongside dollar fluctuations and changing expectations of US monetary policy. The price of 24-karat gold reached approximately 0.59 Kuwaiti dinars per gram (about $141), while 22-karat gold recorded around 0.96 Kuwaiti dinars (about $130). Meanwhile, the price of a kilogram of silver reached approximately 715 dinars (about $2,326).

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