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Gold prices rose to $4,472 per troy ounce on Thursday after a weekly decline of nearly 2%, signaling tentative signs of recovery. The rebound came amid growing expectations that major central banks, including the Federal Reserve, may maintain tighter monetary policies to combat inflation. However, sustained pressure remains due to the inverse relationship between gold and real interest rates, which have risen as central banks signal prolonged high-rate environments. The precious metal's technical outlook shows mixed signals, with traders closely watching key support and resistance levels for potential breakout opportunities.
For markets, the Fed's policy trajectory is critical. Higher real interest rates typically weaken gold's appeal as a non-yielding asset, while lower rates boost demand. Traders should monitor upcoming U.S. inflation data and central bank statements for clues on rate decisions. A breakdown below $4,400 could trigger further declines, while a sustained move above $4,600 might signal a reversal in the short-term trend. Geopolitical tensions and the U.S. dollar's performance will also influence gold's direction.
For MENA investors, the U.S. dollar's strength against regional currencies adds complexity. A weaker dollar could make gold more affordable in Gulf markets, potentially boosting demand. Key events to watch include the Fed's next policy meeting and regional economic data from Saudi Arabia and the UAE. Technical traders should focus on the $4,472 level as a short-term pivot point.
