Gold prices in Kuwait dropped sharply on Monday as international markets reacted to rising oil prices and expectations of further US interest rate increases. In the local market, 24-karat gold fell to KD41.81 per gram from KD42.55 on Friday—a decline of approximately 74 fils per gram, or 1.7 percent. The 22-karat price stood at KD38.33 per gram, while 21-karat gold was KD36.58 and 18-karat gold around KD31.36.
Internationally, spot gold fell more than 2 percent, reaching its lowest level since early August at $4,171.85 per ounce. The decline reflects concerns that higher oil prices will increase inflation, prompting the US Federal Reserve to raise interest rates further. The Fed raised its policy rate earlier this month by 25 basis points to a range of 3.75 to 4 percent, with markets pricing in a significant possibility of another increase in October.
Oil prices climbed amid uncertainty over the Strait of Hormuz, with Brent crude around $107 a barrel on Monday. US President Donald Trump rejected an Iranian proposal linked to reopening the strategic waterway. Higher interest rates pressure gold because the metal does not generate interest income. A stronger US dollar and higher Treasury yields have also contributed to recent bullion weakness.
Source: Arab Times
Add a comment