Gold price leveling off, US employment report may cause fluctuations

World gold prices stagnated while investors waited for the US’s December employment report – a data point that could lead to a change in expectations about the Federal Reserve’s (Fed) monetary policy. The price of domestic gold bars this morning (January 5) stabilized around the threshold of 75 million VND/tael in the selling afternoon, continuing to be higher than the international price of over 14 million VND/tael and higher than the price of gold rings by over 11 million VND/tael. .

At nearly 9:00 a.m., Phu Quy Group quoted the price of SJC gold bars to the Hanoi market at 72 million VND/tael (buying) and 74.8 million VND/tael (selling). Compared to yesterday morning, the price of SJC gold bars at this enterprise is currently unchanged on the buying side but decreased by 100,000 VND/tael on the selling side.

Phu Quy’s 999.9 gold round ring is priced at 62.25 million VND/tael and 63.45 million VND/tael, corresponding to the buying and selling prices, moving sideways compared to yesterday morning.

In the Ho Chi Minh City market, SJC Company quoted the price of gold bars of the same brand at 72 million VND/tael and 75 million VND/tael, unchanged at both prices compared to yesterday morning.

At the same time, the spot price of gold on the international market stood at 2,046.1 USD/oz, almost flat compared to yesterday morning – according to data from the Kitco trading floor. This price is equivalent to nearly 60.4 million VND/tael if converted according to the USD selling exchange rate at Vietcombank.

Compared to the converted world gold price, the retail price of SJC gold bars is 14.4-14.6 million VND/tael higher, while the price of gold rings is about 3 million VND/tael higher.

Vietcombank at the beginning of the morning quoted USD prices at 24,150 VND (buying) and 24,520 VND (selling), down 40 VND at each price compared to yesterday morning.

Before holding prices on Thursday, international gold prices had four consecutive falling sessions. The slowdown in gold prices shows that investors are becoming cautious before the US Department of Labor releases the December overall employment report on Friday.

A slight depreciation of the USD helps support gold prices, but rising US Treasury bond yields put devaluation pressure on this precious metal.

The Dollar Index measuring the strength of the USD fell to 102.4 points, from a 2-week peak of 102.5 points in the previous session. The 10-year US Treasury bond yield closed above the key threshold of 4%, from over 3.9% in the previous session.

“The gold market is in need of a new catalyst for a breakthrough. If employment data is stronger than forecast, downward pressure on gold prices will appear because the market will reduce expectations for the Fed to reduce interest rates,” said senior analyst Jim Wyckoff of Kitco Metals.

Recruitment services firm ADP National Employment’s December jobs report released Thursday showed the U.S. private sector hired more than expected in December – a sign of the market’s enduring strength. job market and economy. Meanwhile, the US Department of Labor’s weekly report showed that the number of people applying for unemployment benefits for the first time last week was more than forecast.

The clash of data above makes the report from the US Department of Labor on Friday even more awaited.

Current developments  world gold last 6 months.  Unit: USD/oz - Source: Trading Economics.
World gold price developments in the past 6 months. Unit: USD/oz – Source: Trading Economics.

The market is betting on a 65% chance of the Fed cutting interest rates from March – according to data from the FedWatch Tool. By the end of 2023, this possibility is more than 80%.

Investors have tempered their expectations for the Fed to cut interest rates in March after the minutes of the Fed’s December meeting released on Wednesday showed that monetary policymakers remained cautious and had not yet issued a Specific time frame for easing.

The market is still assuming that the Fed will reduce interest rates 6 times this year, while the Fed is forecast to only reduce interest rates 3 times for the whole year.

UBS bank analyst Giovanni Staunovo said that if the Fed reduces interest rates a few times this year, gold prices could reach a record of 2,250 USD/oz before the end of the year.

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