Dar Al-Sibaq: Gold Ends Week at $4,195 per Ounce Amid Economic Anticipation
Gold prices ended last week’s trading on an upward note at $4,195 per ounce, posting weekly gains after a series of declines had pushed the precious metal close to the $4,000 level, amid investors’ anticipation of US inflation data and the Federal Reserve’s stance on interest rates.
A report issued today by Kuwaiti Mint Company stated that gold’s recovery was supported by buying activity at lower levels, improved investment demand, and a decline in the US dollar during some trading sessions, despite ongoing pressure from rising yields on US Treasury bonds.
The report noted that gold faced selling pressure at the beginning of the week due to higher yields and renewed concerns about the direction of US monetary policy, before regaining part of its losses by the end of trading.
During Friday’s session, the precious metal rose by more than 1.40 percent, after hitting a low of around $4,130 per ounce, before reaching $4,207 and closing at $4,195. He added that gold’s movements reflected investors returning to buying at lower price levels, although instability above the $4,200 per ounce mark kept the possibility of continued volatility alive.
US data under the microscope
The report noted that US consumer confidence data showed a decline to 46.3 points in October, down from 48.1 points in the preliminary reading and below expectations of 47.6 points, reflecting growing concerns among American households regarding economic conditions. It stated that these data heightened investors’ interest in assessing the outlook for the US economy and its implications for Federal Reserve decisions, as attention turns to inflation and labor market data, among other economic indicators, to determine the trajectory of monetary policy in the coming period.
It pointed out that interest rate expectations remain one of the most significant factors influencing gold’s movement, as investors await the Fed’s meeting next October, amid expectations that interest rates will remain within the 3.75 to 4 percent range, alongside ongoing divergence regarding the likelihood of a rate cut in December. The report emphasized that rising yields on US Treasury bonds represent one of the key pressure factors on the precious metal, given the increased opportunity cost of holding gold, which generates no yield. It clarified that movements in the US dollar remain, in turn, a fundamental factor in determining price direction.
Geopolitical tensions support demand
The report clarified that geopolitical developments in the Middle East, and security tensions in strategic sea lanes, including the Strait of Hormuz and the Bab al-Mandab, could boost demand for gold as a safe haven and a tool for hedging risks. It noted that the impact of these developments remains linked to their repercussions on energy prices and global inflation, as rising energy costs could prompt central banks to keep interest rates high for longer, which may limit gold’s gains, despite increased demand during times of uncertainty.
$4,200 a pivotal level
On the technical front, the report stated that the $4,200 per ounce level represents a key resistance point for gold, as breaking through and stabilizing above it could strengthen upward momentum and pave the way for testing levels of $4,260, then $4,335, reaching $4,500. Conversely, it pointed out that technical indicators show limited improvement in buying momentum, but the persistence of some indicators below their neutral levels reflects an incomplete shift toward a clear upward trend, making the breach of key resistance levels a crucial factor in confirming the continuation of the recovery.
Awaiting this week’s data
The report noted that investors are awaiting the release of a set of important US economic data from October 12 to 16, including the September Consumer Price Index, the Producer Price Index, retail sales data, initial jobless claims, and industrial production. It clarified that the results of these data will help shape market expectations regarding inflation, economic growth, and the interest rate path, thereby influencing the movement of the dollar, bond yields, and gold prices in the coming period.
Gold locally
On the local level, the report clarified that gold prices in the Kuwaiti market continue to be influenced by global ounce movements, alongside changes in the US dollar exchange rate and expectations regarding monetary policy.
The US dollar. According to the report, the price of a gram of 24-karat gold was approximately 0.42290 Kuwaiti dinars, equivalent to about $137, while a gram of 22-karat gold was around 0.38760 Kuwaiti dinars, equivalent to about $125. Meanwhile, the price of a kilogram of silver was approximately 0.671 Kuwaiti dinars, equivalent to about $2,177.
