KUWAIT: Gold prices experienced significant volatility, soaring to an unprecedented level above $3,000 per ounce before retreating to $2,985. According to a specialized report by Kuwait’s Dar Al-Sabayek Company, issued on Sunday, this surge was driven by a combination of economic and geopolitical factors that have heavily influenced global gold markets. The report highlighted that gold briefly touched a historic peak of $3,004 per ounce, propelled by the weakening US dollar and escalating global trade tensions. It further noted that the surge coincided with reports indicating a decline in US consumer confidence, prompting investors to seek safe-haven assets such as gold.

However, the rally was short-lived, as prices declined due to profit-taking, reflecting fluctuations in the US dollar, which directly impact gold demand. The report underscored the role of geopolitical developments in gold price movements, particularly the ongoing conflict between Russia and Ukraine, which has heightened demand for gold as a safe-haven asset amid growing security and political instability.

Additionally, the report pointed out that China has increased its gold reserves for the fourth consecutive month, further supporting prices. As the world’s largest gold buyer, China’s sustained purchases contribute to global demand, thereby exerting upward pressure on prices. Economic concerns in the United States also played a key role, with fears of a potential recession prompting traders and investors to hedge their risks by increasing gold investments. Recent economic data showing rising inflation expectations have reinforced this trend, with gold serving as a hedge against both inflation and economic downturns.

The report noted that many experts anticipate the US Federal Reserve will ease its monetary policy in response to mounting recession fears. It also mentioned that trade policies under former US President Donald Trump had previously raised concerns over tariff impacts, leading to heightened inflationary pressures and increased demand for gold as a safe-haven asset.

Bond markets and the US dollar also reacted to gold price movements. The report indicated that yields on US 10-year Treasury bonds saw a slight increase, negatively impacting gold due to the inverse relationship between bond yields and gold prices. Meanwhile, the US dollar index fell by 0.14 percent, enhancing gold’s appeal in currency markets, as a weaker dollar makes gold more attractive to investors holding other currencies.

Looking ahead, investor focus this week will be on the US Federal Reserve’s interest rate decision, alongside key economic data releases, including retail sales, industrial production, and housing market indicators. Additionally, global markets are closely monitoring interest rate decisions from major economies such as Japan, China, and the United Kingdom, along with inflation data from Canada and Japan, and other influential economic reports from China and Europe.

Local Market Prices

In the local market, the Dar Al-Sabayek report noted that the price of 24-karat gold reached KD 29.63 per gram (approximately $90), while 22-karat gold was priced at KD 27.16 per gram (around $83). Meanwhile, silver prices remained stable at KD 375 per kilogram (approximately $1,225). Gold is traditionally measured in troy ounces, with one troy ounce equaling 31.103 grams, a standard unit of measurement used in the precious metals market. — KUNA