03/05/2026
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03/05/2026
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KUWAIT CITY, May 3: Gold expert Alaa Behbehani says the gold market is currently undergoing a delicate repricing phase, directly influenced by global interest rate policies. He explained that the inverse relationship between interest rates and gold prices is in place, as higher interest rates enhance the attractiveness of yield-generating assets, thus putting downward pressure on gold prices in the short term.
The recent monetary tightening cycle has contributed to limiting gold’s gains, especially with the rise in real returns. This impact does not negate gold’s historical role as a safe haven. The return of geopolitical or economic tensions redirects investments towards gold as a hedging tool. One of the most prominent factors supporting the gold market at present is the increasing demand from central banks, particularly in emerging economies, which are moving towards diversifying their reserves away from major currencies. This demand provides the market with a degree of stability and limits sharp fluctuations. While official demand is important, it does not fully compensate for the decline in investment demand, particularly from funds and individual investors. However, it does contribute to mitigating the severity of the downturn and helps maintain market equilibrium.
Behbehani pointed out that the most likely scenario in the coming period is price movement within fluctuating ranges, with a gradual upward trend, especially if major central banks begin hinting at interest rate cuts. He stressed that this situation reinforces gold’s appeal, emphasizing that while continued high interest rates may keep prices under relative pressure, they will not lead to sharp declines due to sustained official demand and the presence of global risks that support investors’ inclination towards safe-haven assets. Behbehani affirmed that gold will remain one of the most important tools for preserving value in the long term.
By Marwa Al-Bahrawi Al-Seyassah/Arab Times Staff
