Gold prices fell deeply as the FED was likely to raise interest rates this week. Gold is very sensitive to US interest rates raising, which increases the opportunity cost of holding capital with no income.
According to INVESTING data, spot prices for gold in the international market registered a drop of more than USD 27 (equivalent to 1.4%) to USD 1,963/ounce at 5:30 PM today 3/3 by Vietnam time.
International gold prices have fallen continuously after crossing the $2,000/ounce mark and the highest level since August 2020 early last week. From its peak on March 9, the international gold price fell by more than 4%.
The gold futures price recognized in April also fell 0.85% at the same time to 1,968 USD/ounce, losing nearly 4.5% from the peak created on March 9.
Gold prices also plummeted on the domestic market today. At 4:00 PM, Gold and Silver Gold Wealth (PNJ) quoted the SJC gold price at 67.4 – 69 million dong/tael, down 1.1 million dong, selling VND 1.5 million at the end of the year. previous session.
Likewise, Doji Group has also adjusted its gold price to VND 67.7 – 68.8 million/tael. Bao Tin Minh Chau Gold Trading SJC for 67.02 – 68.78 million VND/tael.
Domestic and international gold prices fell sharply in the context of the Fed’s expectation of raising interest rates to push government bond yields to a one-month high. Gold is very sensitive to US interest rates raising, which increases the opportunity cost of holding capital with no income. In addition, if the FED, so that the USD to raise the price to curb inflation, also reduces the attractiveness of gold.
In addition, hopefully progress in the Russia-Ukraine peace negotiations has also helped improve the risk appetite and reduce the attractiveness of gold pieces.
Meanwhile, many analysts still expect a positive future for the gold price. Rjo Futures’ senior market strategist Frank Cholly said the adjustment after the price rose more than USD 2,000/ounce is a good thing for gold.
Gold will continue to rise towards the $2,050 area. I don’t think next week’s hierarchy will hurt the market,” Cholly told Kitco News.
The expert also adds that gold will easily return to USD 2,050/ounce in the near term. In addition, the Fed is unlikely to surprise a 50-base rise, as the agency has signaled a more cautious approach to raising interest rates to avoid sliding the economy into recession.
According to Main Street’s survey results, 634 people were asked, which corresponds to 63% of the online poll votes broadcast, and said gold will rise next week; 223 others, equal to 22%, indicating that the price will fall; While 156 people, equal to 15%, predict the horizontal price.