Gold prices fell deep when it was likely that the FED would raise interest rates this week. Gold is very sensitive to the US raising interest rates, which increases the opportunity costs of gold holding capital without income.
According to INVESTING data, spot gold prices in the international market recorded a decrease of more than 27 USD (equivalent to 1.4%) to 1,963 USD/ounce at 17:30 today 14/3 by Vietnam time.
International gold prices have continuously decreased after crossing the USD 2,000/ounce and setting the highest level since August 2020 at the beginning of last week. From the peak recorded on March 9, international gold prices fell more than 4%.
The futures gold price delivered in April recognition at the same time also decreased by 0.85% to 1,968 USD/ounce and lost nearly 4.5% compared to the peak created on March 9.
In the domestic market, gold prices also plummeted today. Specifically, at 16:00, gold and silver gold riches (PNJ) listed SJC gold price at 67.4 – 69 million dong/tael, down 1.1 million dong, VND 1.5 million in selling with the end of the previous session.
Similarly, Doji Group also adjusted its gold price to VND 67.7 – 68.8 million/tael. Bao Tin Minh Chau Gold Trading SJC for 67.02 – 68.78 million VND/tael.
Domestic and international gold prices fell deeply in the context that the Fed expectation increased interest rates to raise the treasury bond yield to the highest level in a month. Gold is very sensitive to the US raising interest rates, which increases the opportunity costs of gold holding capital without income. In addition, if the FED so that the USD to increase the price to curb inflation also reduces the attractiveness of gold.
Besides, hopefully about a progress in peace negotiations between Russia-Ukraine also helped improve risk taste and reduce the attractiveness of gold pieces.
Meanwhile, many analysts still expect a positive future of gold prices. Rjo Futures’ senior market strategist Frank Cholly said the adjustment after the price increased by over 2,000 USD/ounce is a good thing for gold.
“Gold will continue to rise higher to the area of $ 2,050. I don’t think the hierarchy next week will harm the market”, Cholly said to Kitco News.
The expert also adds that gold will easily return to 2,050 USD/ounce in the short term. In addition, the Fed is unlikely to surprise a 50 basis increase because the agency has signaled a more cautious approach when raising interest rates to avoid pushing the economy into recession.
According to the Survey Results of Main Street, 634 people were asked, equivalent to 63% of the online survey votes were broadcast, said that gold will increase next week; 223 others, equivalent to 22%, indicating that the price will decrease; While 156 people, equivalent to 15%, forecast the horizontal price.
@ Cafef
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Source: Vietnam Insider