Gold price stuck, will "explode" after Fed's interest rate decision; unlikely to increase sharply before June 13

Gold prices today, June 9, increased sharply when receiving support from expectations that the Fed will keep interest rates unchanged next week. However, the world gold price is currently "stuck" in the range of 1,930 - 1,985 USD/ounce, but the precious metal may break the upper limit of this range, after the Fed makes an interest rate decision next week.

LIVE UPDATE TABLE OF GOLD PRICE TODAY 6/9 and EXCHANGE RATE TODAY 6/9

1. SJC - Updated: 06/08/2023 10:09 - Website time of supply - ▼ / ▲ Compared to yesterday.
Type	Buy	Sell
SJC 1L, 10L	66,400 ▼50K	67,000 ▼50K
SJC 5c	66,400 ▼50K	67,020 ▼50K
SJC 2c, 1c, 5c	66,400 ▼50K	67,030 ▼50K
SJC 99.99 gold ring 1 chi, 2 chi, 5 chi	55,450 ▼100K	56,400 ▼100K
SJC 99.99 gold ring 0.5 chi	55,450 ▼100K	56,500 ▼100K
Jewelry 99.99%	55,300 ▼100K	56,000 ▼100K
Jewelry 99%	54,246 ▼99K	55,446 ▼99K
Jewelry 68%	36,234 ▼68K	38,234 ▼68K
Jewelry 41.7%	21,504 ▼42K	23,504 ▼42K

Gold prices rose sharply on the back of a weaker US dollar, but investors remained cautious ahead of the US Federal Reserve’s interest rate strategy and other economic signals. Despite the increase, gold prices remained close to the previous session’s low as investors waited for signals from the Fed before making investment decisions. Supporting the gold market, the US dollar index fell 0.2%, but remained near its highest level in nearly three months.

According to TG&VN at 9:20 p.m. on June 8 on Kitco, the gold price was trading at 1,968.10 - 1,969.10 USD/ounce, up 28.5 USD compared to the previous session . Last time, the gold price for August delivery increased by 1.70 USD to 1,960.10 USD/ounce.

The market is now expecting the Fed to hold off on raising interest rates for the first time in more than a year at its June monetary policy meeting (June 13-14). However, Clifford Bennett, chief economist at investment brokerage ACY Securities , said that even if the Fed pauses its rate hikes at the next meeting, the central bank still has the ability to raise rates because inflation remains at extreme levels.

Gold prices are always sensitive to interest rate adjustments in the US economy. Rising interest rates will help the USD strengthen, but significantly reduce the attractiveness of non-yielding assets such as gold.

Gold price today June 9, 2023: Gold price stuck, will 'explode' after Fed's interest rate decision; unlikely to increase sharply before June 13. (Source:shutterstock)

Domestic gold prices fluctuated slightly, temporarily stopping the downward trend at the beginning of the session and increasing again by 50,000 - 100,000 VND/tael. The difference between buying and selling prices of SJC gold is still around 600,000 VND/tael. Experts say that 600,000 VND/tael is still a high difference. The safe difference between buying and selling prices for investors to limit the risk of loss is 300,000 VND/tael. However, SJC gold has not been traded with such a difference for a long time.

Summary of SJC gold prices at major domestic trading brands at the closing time of the trading session on June 8:

Saigon Jewelry Company listed the price of SJC gold at 66.40 - 67.02 million VND/tael.

Doji Group currently lists SJC gold price at: 66.40 - 67.00 million VND/tael.

Phu Quy Group listed at: 66.40 - 67.00 million VND/tael.

PNJ system listed at: 66.45 - 67.00 million VND/tael.

SJC gold price at Bao Tin Minh Chau is listed at: 66.42 - 66.98 million VND/tael; Rong Thang Long gold brand is traded at 55.48 - 56.33 million VND/tael; jewelry gold price is traded at 55.15 - 56.15 million VND/tael.

Converting world gold price according to USD exchange rate at Vietcombank on the morning of June 8: 1 USD = 23,655 VND, world gold price is equivalent to 56.19 million VND/tael, 10.76 million VND/tael lower than SJC gold selling price.

Gold price forecast expert?

After testing record highs and rising to $2,085/ounce in May, gold has sold off and is now testing support at $1,960/ounce.

On June 13, right before the Fed meeting, the US economy's May 2023 Consumer Inflation Report is expected to be released. The market hopes the report will provide clearer information about the "health" of the world's largest economy.

Gold's upside potential may be limited ahead of next week's US CPI report and the Fed meeting, said Michael Hewson, chief market analyst at CMC Markets. A weak CPI report could push gold back to $1,980. Hewson added that gold would need to hold technical support around $1,920 to return to $2,000.

Other analysts also said that gold is likely to fluctuate in a narrow range before the US consumer inflation report on June 13 and the Fed meeting on June 13-14.

Meanwhile, CitiBank has cut its gold price target for the next three months from $2,100/ounce to $1,915/ounce, saying that the factors supporting gold's price increase will reappear before the end of 2023. CitiBank noted that gold remains a risk-off tool, despite the Fed's move to raise interest rates.

The CME Fedwatch tool currently pegs the odds of a pause in tightening next week at around 64.4% and a 51% chance of a rate hike in July.

A recent report by Metals Focus, an independent precious metals research consultancy, shows that global gold demand is expected to fall by 9% in 2023. The reason is that central banks have reduced their precious metal purchases after a record year of buying.

In contrast, total gold supply is forecast to increase by 2%, driven by higher mining and recycling output. The gold market could return to a surplus of more than 500 tonnes this year.

"Gold prices are estimated to rise 5% year-on-year to a new all-time high of $1,890 an ounce, but will come under pressure in the second half of the year," said Philip Newman, managing director of Metals Focus .

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