World gold prices dropped, but domestic gold prices still increased

World gold prices decreased due to the strong increase in the USD after the statement of US Federal Reserve Chairman Jerome Powell on the outlook for interest rates. The domestic gold bar price this morning (February 6) increased to 78.5 million VND/tael, 18.5 million VND/tael higher than the converted world gold price.

At nearly 10:00 a.m., Phu Quy Group listed the price of SJC gold bars for the Hanoi market at 76.3 million VND/tael (buying) and 78.5 million VND/tael (selling). The 999.9 Phu Quy plain round ring is priced at 64.4 million VND/tael and 65.5 million VND/tael, respectively, buying and selling prices.

In the Ho Chi Minh City market, SJC Company quoted the price of gold bars of the same brand at 76.3 million VND/tael and 78.5 million VND/tael.

Compared to yesterday morning, the price of SJC gold bars currently increased by about 500,000-600,000 VND/tael depending on the listing of each business, while the price of gold rings decreased by 100,000 VND/tael or went sideways.

At the same time, the spot price of gold in the Asian market stood at 2,026.7 USD/oz, up 0.8 USD/oz compared to last night’s closing session in New York – according to data from the Kitco trading floor. . This price is equivalent to approximately 60 million VND/tael if converted at the USD selling rate at Vietcombank.

Compared to yesterday morning, the converted world gold price is currently down about 300,000 VND/tael.

Compared to the converted world gold price, the retail price of SJC gold bars is 18.5 million VND/tael higher, while the price of gold rings is about 5.5 million VND/tael higher. The difference between domestic and world gold prices is increasing, because domestic gold prices decrease more slowly when world prices decrease and increase faster when world prices increase, and even increase even when world prices decrease.

On Monday session in the US, spot gold price decreased by 14 USD/oz, equivalent to a decrease of nearly 0.7%, compared to the close last weekend, to 2,025.9 USD/oz.

Gold prices fell to their lowest level in more than a week under pressure from the USD exchange rate and US Treasury bond yields increased after the latest statement from the Fed Chairman.

The 10-year US Treasury bond yield at one point increased 13 basis points, reaching 4.166%. Last week, the yield on 10-year US Treasury bonds fluctuated around 3.81%.

The Dollar Index, which measures the strength of the USD against a basket of six other major currencies, increased 0.5%, closing at 104.4 points, a 12-week high.

Current developments  world gold in the past 5 years.  Unit: USD/oz - Source: Trading Economics.
World gold price developments over the past 5 years. Unit: USD/oz – Source: Trading Economics.

In a rare television interview broadcast on CBS News on Sunday, Mr. Powell again pushed back on expectations that the central bank would soon cut interest rates. He said that it is almost time for the Fed to reduce interest rates, but the central bank still needs to be patient and wise in deciding when it is appropriate to lower interest rates. Along with that, he ruled out the possibility of starting to reduce interest rates in March, similar to his statement after the Fed’s regular meeting last week.

After Mr. Powell’s interview, traders’ bets on the possibility of the Fed lowering interest rates in March continued to decrease, to only 16.5% – according to data from the exchange’s FedWatch Tool. CME translation.

In addition to Mr. Powell’s statement, expectations about when the Fed will reduce interest rates are also pushed back by recent data showing that the US economy is still strong, especially the January jobs report released by the US Department of Labor. Dad last Friday.

“We are seeing the impact of a strong jobs report. That report pushed US Treasury bond yields and the USD exchange rate to higher levels, thereby causing downward pressure on gold prices,” said senior analyst Jim Wyckoff of Kitco Metals.

In addition, Minneapolis Fed President Neel Kashkari also said on Monday that the strength of the US economy and the fact that the neutral interest rate may have increased means that the Fed may have to wait another month. time before deciding to lower interest rates.

However, according to Mr. Wyckoff, gold prices will maintain the $2,000/oz mark in the short term as geopolitical tensions in the Middle East encourage the need to hedge risks.

Vietcombank this morning quoted USD price at 24,180 VND (buy) and 24,550 VND (sell), down 20 VND at each price compared to yesterday morning.

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