Gold Stabilizes as Global Markets Weigh US Economy

Background

Gold prices concluded the recent trading week with stability, settling around $4,595 per ounce after experiencing a notable decline. This movement reflects a complex interplay of global economic signals and geopolitical developments, as detailed in a recent analysis by Kuwait’s Dar Al-Sabaik Company.

Market Context

The precious metal’s recent dip was primarily attributed to profit-taking activities and a perceived easing of geopolitical tensions. Despite this late-week correction, gold futures for February delivery recorded a weekly gain of approximately 2.4 percent, following earlier surges to record highs.

Local Relevance

Initially, escalating geopolitical concerns, particularly regarding potential military actions in the Middle East, provided strong support for gold as a safe-haven asset. However, a subsequent de-escalation of these tensions, coupled with robust economic data from the United States, shifted market sentiment.

Outlook

Strong US economic indicators, including better-than-expected industrial production, a resilient labor market, and declining unemployment claims, bolstered the US dollar and pushed Treasury yields higher. These factors collectively diminished the appeal of non-yielding gold, contributing to its downward pressure.

Analysts now anticipate the US Federal Reserve will maintain its current interest rate policy at its upcoming meeting, with significant monetary easing not expected until mid-2026. This outlook has tempered expectations for gold’s short-term upward momentum, influencing investor strategies globally.

For Kuwaiti and GCC investors, these global trends are closely mirrored in local markets. The price of 24-karat gold in Kuwait reached approximately 45.420 Kuwaiti dinars (around $150) per gram, while 22-karat gold stood at 41.630 dinars (around $137.30). Silver prices also remained stable, reflecting the broader precious metals market.

Looking ahead, market participants are keenly awaiting key US economic data, including inflation figures, personal income and spending reports, and GDP readings. These upcoming announcements are expected to provide further clarity on the Federal Reserve’s policy trajectory and, consequently, gold’s future price movements.