Kuwait Gold Prices Skyrocket Amid Geopolitical Uncertainty and Weak Labor Market

Gold prices in Kuwait surged to $4,342 per ounce at the end of last week, marking their highest level since June 17. This significant gain was largely driven by a weak US labor market and continued geopolitical uncertainty in the Middle East.

The US nonfarm payrolls report for July revealed a loss of 23,000 jobs, falling short of forecasts which had predicted an addition of around 80,000 jobs. Additionally, downward revisions to employment figures for May and June showed that the US economy lost about 103,000 jobs overall, further solidifying expectations of slower labor market growth.

This shift in market expectations led to a decline in probability for US interest-rate hikes, with the Federal Reserve's September meeting now seen as less likely to include rate increases. As a result, the US dollar index dropped by about 99 points against major currencies, making gold a more appealing non-yielding asset.

Despite continued cautious optimism over potential agreements between the United States and Iran, geopolitical uncertainty in the Middle East persisted, maintaining the premium associated with gold prices due to its perceived safe-haven status.