ANTD.VN - Investors took profits, causing gold prices to fall after the US inflation report overshadowed speculation about the possibility of the US Federal Reserve (Fed) cutting interest rates this year.
On the world market, at the end of the US market trading session on May 10 (last night Vietnam time), the spot gold price stood at 2,019.8 USD/ounce, down 4.4 USD during the session.
Notably, during the session, this precious metal jumped to a price of nearly 2,050 USD/ounce before encountering profit-taking selling pressure from investors.
US gold futures for June delivery also fell, closing at $2,037.10 an ounce on May 10.
By this morning, the precious metal recovered slightly in the Asian market with spot gold trading around $2,033.5/ounce.
In Vietnam, gold prices also increased slightly with an increase of about 50 thousand VND per tael for SJC gold. Accordingly, the national gold brand is trading around 66.55 - 67.15 million VND/tael (buy - sell).
Branded gold of enterprises continues to remain high with SJC 99.99 gold ring listed at 56.50 - 57.50 million VND/tael.
The decline in international gold prices after approaching $2,050/ounce in the session on May 10 is believed to be due to the US inflation report being released, which has overshadowed speculations about the possibility of the Fed cutting interest rates this year. Thus, high interest rates will be maintained for longer, while gold is in need of signals of interest rate cuts to maintain a sustainable upward momentum.
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Gold prices are having a bit of a tough time as US inflation remains high |
The US Labor Department said on May 10 that consumer prices continued to rise in April due to rising fuel costs and rents, while inflation remained high.
The US consumer price index (CPI) rose 0.4% in April, after rising 0.1% in the previous month. Year-on-year, the CPI rose 4.9% in April, down slightly from March's 5% increase.
Gold could struggle in the short term with core inflation unchanged from last month and well above the Fed's target, some experts say.
While gold is seen as an effective hedge against inflation, rising interest rates reduce the appeal of the precious metal.
Still, some analysts say gold could surge to record highs again, amid persistent economic concerns, including the risk of a US debt default.
President Biden met with House Speaker Kevin McCarthy and other congressional leaders on Tuesday afternoon to discuss the debt ceiling. No agreement was reached, but lawmakers and the president will meet again on Friday.
US Treasury Secretary Janet Yellen recently said that the US government could run out of money by June 1 if the debt ceiling is not raised. Thus, if May ends without a deal to extend the US debt, the anxiety in the general market will increase.
In other news, China is expanding its gold reserves and may ditch the US dollar. China's gold reserves rose 8.09 tonnes in April, bringing its total gold holdings to 2,076 tonnes after the country added 120 tonnes in the five months to March.
China has traditionally been a major buyer of US bonds, but that has cooled significantly as Beijing swaps them for gold.
The strategic move is expected to curb China's dependence on the US dollar, as trade and political relations with the US continue to deteriorate.
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