World and domestic gold prices simultaneously dropped

World gold prices fell the most in the past 3 weeks, when the USD exchange rate rose to the highest level in 2 weeks due to falling expectations of the US Federal Reserve (Fed) reducing interest rates in 2024. The domestic price of gold bars this morning (January 4) also decreased, but is still about 14.5 million VND/tael higher than the converted international price.

At nearly 10 a.m. Vietnam time, the spot price of gold on the international market stood at 2,045 USD/oz, up 2.8 USD/oz compared to the close of the US session last night, but down about 20 USD/oz, equivalent to down nearly 1% compared to the price at the same time yesterday – according to data from the Kitco exchange.

At this price, the world gold price is equivalent to about 60.5 million VND/tael if converted at the USD selling rate at Vietcombank, down 500,000 VND/tael compared to yesterday morning.

Phu Quy Group at nearly 10 a.m. quoted the price of SJC gold bars for the Hanoi market at 72 million VND/tael (buying) and 74.9 million VND/tael (selling). Compared to yesterday morning, the price of SJC gold bars at this enterprise currently increased by 500,000 VND/tael on the buying side and decreased by 100,000 VND/tael on the selling side.

Phu Quy 999.9 gold round ring is priced at 62.25 million VND/tael and 63.45 million VND/tael, respectively, buying and selling price, down 250,000 VND/tael at each price 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, down 500,000 VND/tael at each end of the price.

Compared to the converted world gold price, the retail price of SJC gold bars is 14.4-14.5 million VND/tael higher, while the price of gold rings is about 3 million VND/tael higher.

The world gold price is at its lowest level in the past 2 weeks, with a 1% decrease last night being the strongest loss of this precious metal since December 11. Putting downward pressure on gold prices were the minutes of the Fed’s December meeting, which increased uncertainty about when the central bank might cut interest rates. The USD also increased sharply after this minutes was published, causing even greater pressure on gold to depreciate.

The minutes showed that policymakers on the Federal Open Market Committee (FOMC) – the decision-making arm of the Fed – appeared confident that inflation was under control, with “inflation risks rising”. has weakened and concerns that excessively tightening monetary policy could damage the economy are growing. However, the minutes also show that the Fed has not yet determined a specific time for the first interest rate reduction, and there is no guarantee that the Fed will reduce interest rates three times as forecast at this meeting.

“Meeting participants generally emphasized the importance of maintaining a cautious approach and relying on specific economic data to make monetary policy decisions, and reaffirmed that it would be appropriate for monetary policy to remain tight for a period of time until inflation clearly and sustainably falls toward target,” the Fed meeting minutes read.

Current developments  world gold 1 year ago.  Unit: USD/oz.
World gold price developments over the past year. Unit: USD/oz.

“’Let’s be cautious’ is the message coming from the minutes of the Fed’s December meeting. Interest rates may have peaked, but rate cuts will take more time, especially as financial conditions are loosening and uncertainty increases,” New York-based precious metals trader Tai Wong told Reuters news agency.

The market is expecting the Fed to reduce interest rates for the first time in March and have six reductions this year. However, bets on the first interest rate cut in March have dropped to 70% – according to data from CME’s FedWatch Tool. Before the Fed minutes were released, the stakes were more than 80%.

The Dollar Index, measuring the strength of the USD, increased by 0.3%, reaching 102.5 points at the close, the highest since mid-December. Because gold is priced in USD, the increase in USD price has put pressure. decrease in gold price. The greenback has recovered in recent sessions, after falling 2% last month on expectations the Fed would soon cut interest rates.

Domestically, Vietcombank this morning quoted USD prices at 24,190 VND (buy) and 24,560 VND (sell), an increase of 40 VND at each price compared to yesterday morning.

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