Kuwait Gold Prices Slide as Hormuz Crisis Pushes Oil Higher

KUWAIT CITY, Sept 28: Gold prices fell sharply on Monday, with the decline reflected in Kuwait’s local market, as higher oil prices linked to uncertainty over the Strait of Hormuz strengthened expectations that the US Federal Reserve could raise interest rates further.

In Kuwait, 24-karat gold was trading at around KD41.81 per gram on Monday, down from about KD42.55 on Friday, a decline of approximately 74 fils per gram, or 1.7 percent. The 22-karat price stood at around KD38.33 per gram, while 21-karat gold was about KD36.58 and 18-karat gold around KD31.36. The quoted rates represent the value of the metal before jewellery-making charges.

Internationally, spot gold fell more than 2 percent in early trading on Monday, reaching its lowest level since early August, as rising oil prices heightened concerns over inflation and strengthened expectations of further US interest-rate increases. Reuters reported spot gold at $4,171.85 an ounce at 0627 GMT, down 2.7 percent.

The rise in oil prices came amid continuing uncertainty over the Strait of Hormuz. Oil prices moved higher after US President Donald Trump rejected an Iranian proposal linked to reopening the strategic waterway, while Iran maintained its position on the conditions for reopening the strait. Reuters reported Brent crude around $107 a barrel on Monday.

Higher energy prices can add to inflationary pressure, potentially making it more difficult for the Federal Reserve to ease monetary policy. The Fed raised its policy rate earlier this month by 25 basis points to a range of 3.75 percent to 4 percent, and markets were pricing in a significant possibility of another increase in October. Higher interest rates can weigh on gold because the metal does not generate interest income.

The latest decline extends gold’s recent weakness after the metal fell more than 2 percent last week. A stronger US dollar and higher Treasury yields have also contributed to pressure on bullion in recent sessions.

Kuwait gold prices can change during the day in line with international bullion prices and currency movements, while retail jewellery prices may be higher because of making charges and other shop-specific costs.

Source: For Gold Rates in Kuwait