Gold prices reached a historic peak of $3,022 per ounce at the close of last week’s trading, driven by ongoing global economic and geopolitical tensions. A report from Kuwaiti bullion company Dar Al-Sabayek released on Sunday highlighted that gold had briefly surged to an all-time high of $3,057 per ounce midweek before pulling back slightly due to profit-taking by investors. Despite this small dip, gold registered a 0.7% increase over the past week, marking its third consecutive week of gains.
The rise in gold prices is largely attributed to growing expectations that the US Federal Reserve may reduce interest rates in the near future. Although the Federal Reserve recently held interest rates steady, it signaled the possibility of two rate cuts this year, boosting gold’s appeal as a safe-haven investment. Investors flocked to gold, seeking protection from global instability and the prospect of more favorable monetary policies in the US.
Geopolitical tensions also played a major role in driving gold demand. The ongoing conflict in Gaza and missile strikes from Yemen targeting US warships in the Red Sea have contributed to increased investor interest in gold as a hedge against uncertainty. However, the strengthening of the US dollar, which recently hit 104.06 points, put downward pressure on gold prices, making it more expensive for foreign investors.
These record-breaking prices reflect growing concerns over the global economy’s future and escalating political risks. Investors have been turning to gold as a protective measure against these threats, including lingering trade tensions from the Trump administration’s “America First” policies, which have unsettled financial markets and added to global uncertainty.
Looking forward, experts predict that geopolitical instability will continue to support gold prices in the short term. Ongoing military conflicts, including the Gaza crisis, tensions in Ukraine, and volatility in the Red Sea, are expected to keep gold in demand as a safe-haven asset. Analysts forecast that gold prices could reach as high as $3,500 per ounce by the end of the year, contingent on accommodative monetary policies in the US and a potential economic recession.
This week, market participants will be closely watching key economic data, including Federal Reserve statements on monetary policy and personal income figures. These could influence both the price of gold and the direction of the US dollar. Locally, the price of 24-karat gold was reported at KD 30.15 per gram (approximately $92), while 22-karat gold stood at KD 27.54 per gram (about $84). Meanwhile, silver prices remained stable at KD 368 per kilogram (roughly $1,202).
As geopolitical tensions continue and economic uncertainty persists, gold remains a crucial asset for investors seeking stability amid global volatility.
