World gold prices plummeted after the US inflation report, domestic gold rings lost 1.5 million VND/tael

World gold prices dropped sharply in the trading session on Tuesday (March 12), after the US announced higher-than-expected February inflation figures – a data point that raises the possibility of the Federal Reserve (Fed) ) keep interest rates higher for longer. Domestically this morning (March 13), the price of gold rings “evaporated” to 1.4-1.5 million VND/tael, while the price of gold bars slipped from the mark of 82 million VND/tael.

At the close of last night’s trading session according to Vietnam time in the New York market, spot gold price decreased by 24.2 USD/oz, equivalent to a decrease of 1.1%, to 2,158.6 USD/oz – according to data from Kitco trading platform.

A report from the US Department of Labor released on Tuesday showed that the headline consumer price index (CPI) increased 0.4% in February compared to January and increased 3.2% over the same period last year. The monthly increase was in line with expectations, but the full-year increase was 0.1 percentage point higher than the 3.1% increase forecast by economists in a Dow Jones survey.

Core CPI, a measure that excludes two commodity groups with large and frequent price fluctuations: energy and food, increased 0.4% on a monthly basis and 3.8% on a yearly basis. These two increases are both 0.1 percentage points higher than forecast.

“Inflation data is indeed hot, but the market has inherently anticipated part of this problem. Initially after the report was published, gold prices had almost no significant reaction. But after that, the price started to fluctuate strongly,” independent precious metals analyst Tai Wong told Reuters news agency.

With inflation falling slowly and a persistent risk above the Fed’s 2% target, the market believes that the Fed is unlikely to cut interest rates at a fast and strong pace this year. However, basically, the market still believes that the first interest rate cut will be conducted by the Fed in June this year.

According to Mr. Wong, gold bulls are still looking for reasons to push prices higher. “The focus will shift to the Fed’s monetary policy meeting next week. At this meeting, the Fed will provide an update to its interest rate forecast,” the trader said.

CME’s FedWatch Tool shows traders are betting on a 69.8% chance of a June start to the Fed’s monetary policy easing cycle, from 71.7% in the previous session. The Fed’s next meeting will take place on March 19-20.

Gold prices set an all-time record at nearly $2,200/oz last week. Many analysts believe that at such a price range, even without downward pressure from interest rates, gold prices can still cope with downward pressure from investors’ need to take profits.

According to Mr. Aakash Doshi, head of North American commodity market research at Citi Research, in the short term, gold prices will shift to an accumulation state and may remain stable at around 2,100 USD/oz. before breaking through the 2,200 USD/oz mark at the end of the second quarter of this year.

Current developments  world gold 1 year ago.  Unit: USD/oz - Source: Trading Economics.
World gold price developments over the past year. Unit: USD/oz – Source: Trading Economics.

Domestically at 9am this morning, Phu Quy Group listed the price of SJC gold bars for the Hanoi market at 79.9 million VND/tael (buying) and 81.9 million VND/tael (selling). Compared to the same time yesterday, the price of SJC gold bars at this enterprise is currently down 400,000 VND/tael on the buying side and down 300,000 VND/tael on the selling side.

Phu Quy brand 999.9 plain round ring is priced at 68.5 million VND/tael and 69.9 million VND/tael, corresponding to the buying and selling price, down 1.5 million VND/tael and 1.4 million VND/tael. compared to yesterday morning.

Bao Tin Minh Chau Company quoted the price of 999.9 plain round gold ring of Thang Long Dragon brand at 69.03 million VND/tael and 70.38 million VND/tael, down 1.77 million VND/tael and 1 million VND/tael. quantity compared to yesterday morning.

In the Ho Chi Minh City market, SJC Company quoted the price of gold bars of the same brand at 79.8 million VND/tael and 81.8 million VND/tael, down 500,000 VND/tael at each price compared to yesterday morning.

SJC round rings are priced at 68 million VND/tael (buying) and 69.3-69.4 million VND/tael (selling) depending on product weight, down 900,000 VND/tael on the purchase side and down 950,000 VND/tael in the selling afternoon.

Spot gold price in the Asian market at 9:00 a.m. Vietnam time stood at 2,158 USD/oz, down 0.6 USD/oz compared to Tuesday’s closing session in the New York market – according to data. materials from Kitco.

This price is equivalent to about 64.5 million VND/tael if converted at the USD selling rate at Vietcombank, down 600,000 VND/tael compared to yesterday morning.

Compared to the converted world gold price, the retail price of SJC gold bars is up to 17.4 million VND/tael higher, while the price of gold rings is up to 5.9 million VND/tael higher.

Vietcombank this morning quoted USD price at 24,450 VND (buy) and 24,820 VND (sell), an increase of 20 VND at each price compared to yesterday morning.

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