The world gold price is bright green after the Fed meeting, domestically exceeding 74 million VND/tael

World gold prices soared past the threshold of 2,000 USD/oz after the US Federal Reserve (Fed) signaled softness on monetary policy. Domestic gold price this morning (December 14) increased by 600,000-700,000 VND/tael as soon as it opened.

At nearly 9:00 a.m., Phu Quy Group listed the price of SJC gold bars for the Hanoi market at 73.3 million VND/tael (buy) and 74.3 million VND/tael (sell), an increase of 750,000 VND/tael. quantity at each price compared to yesterday morning.

Phu Quy brand 999.9 plain round ring is priced at 60.75 million VND/tael and 61.95 million VND/tael, corresponding to the buying and selling prices, an increase of 600,000 VND/tael and 700,000 VND/tael compared to yesterday morning.

In the Ho Chi Minh City market, SJC Company quoted the price of gold bars of the same brand at 73.3 million VND/tael and 74.3 million VND/tael, an increase of 700,000 VND/tael at each price compared to yesterday morning.

At the same time, the spot price of gold in the Asian market stood at 2,030.7 USD/oz, an increase of 2.5 USD/oz, equivalent to an increase of 0.12%, compared to the closing session on Tuesday. in the US market – according to data from the Kitco exchange.

This price is equivalent to about 59.7 million VND/tael if converted according to the USD selling exchange rate at Vietcombank. Compared to yesterday morning, the converted world gold price has now increased by 1.5 million VND/tael.

Because the domestic gold price increased less than the world price, the difference between the domestic gold price and the international price was shortened. Compared to the converted world gold price, the price of gold bars is 14.6 million VND/tael higher, from 15.4 million VND/tael higher yesterday morning. The price of gold rings is 2.3 million VND/tael higher than the international price.

Wednesday’s session in the New York market, spot gold price increased by 47.7 USD/oz, equivalent to an increase of more than 2.4%, closing at 2,028.2 USD/oz.

Gold prices increased sharply when US Treasury bond yields and the USD exchange rate decreased sharply after the Fed meeting.

In a decision that was not unexpected, the Fed kept the federal funds rate, which is the overnight borrowing rate and acts as the Fed’s operating interest rate, unchanged at 5.25-5.5%. More importantly, in updating the “dot plot” interest rate forecast, the Fed plans to cut interest rates 3 times next year – more than the number 2 times given in the update in September. Along with that, the Chairman Fed Jerome Powell said that further interest rate increases are no longer the “main scenario” at this time, although it is “too early” to declare victory over inflation.

This is considered a soft signal, marking the first time in this tightening cycle that the world’s most powerful central bank acknowledged positive developments in inflation.

In addition, statistical data released on Wednesday continued to confirm the weakening trend of inflation, with the producer price index (PPI) in November unchanged compared to October. Previously, public data Tuesday’s announcement showed that the CPI’s monthly and yearly increases were consistent with forecasts.

Giá  world gold  increased about 3.8% in the past 6 months.  Unit: USD/oz.
World gold prices have increased about 3.8% in the past 6 months. Unit: USD/oz.

The financial market is confident that the Fed has completed the cycle of raising interest rates, and predicts that the Fed will reduce interest rates up to 6 times in 2024 with a total cut of 1.5 percentage points.

“The Fed’s acknowledgment that inflationary pressures continue to decline has increased expectations for interest rate cuts. This led to a sharp decrease in US Treasury bond yields and the USD exchange rate, leading to a sharp increase in gold prices. We believe that this increase in gold prices is sustainable,” said Director of precious metals trading at High Ridge Futures, Mr. David Meger.

The yield on 10-year US Treasury bonds sometimes decreased by 19 basis points, to 5.016%, the lowest level since August. The Dollar Index closed at 102.9 points, down nearly 1% compared to previous session. This morning, the index continued to decrease, falling below the threshold of 102.7 points.

According to data from CME’s FedWatch Tool, traders are betting on a 60% chance of the Fed cutting interest rates from March.

The world’s largest gold exchange-traded fund (ETF) SPDR Gold Trust net bought about 2.2 tons of gold during Wednesday’s session, increasing its holdings to nearly 878 tons. Before the Fed meeting, the fund sold a total of 5 tons of gold in two consecutive sessions.

Vietcombank this morning quoted USD price at 24,020 VND (buy) and 24,390 VND (sell), down 40 VND at each price compared to yesterday morning.

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