Gold prices fall under selling pressure, investor sentiment is relieved, will gold continue to fall?

Gold prices fell slightly today, June 2, after witnessing some selling pressure as the US labor market continued to operate at full capacity with private sector employment increasing more than expected. The US House of Representatives' approval of a debt ceiling agreement also created downward pressure on gold prices.

LIVE UPDATE TABLE OF GOLD PRICE TODAY 6/2 and EXCHANGE RATE TODAY 6/2

1. SJC - Updated: 06/01/2023 09:55 - 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	55,550	56,500
SJC 99.99 gold ring 0.5 chi	55,550	56,600
Jewelry 99.99%	55,400	56,100
Jewelry 99%	54,345	55,545
Jewelry 68%	36,302	38,302
Jewelry 41.7%	21,546	23,546

Gold prices fell after rebounding sharply from a two-month low earlier in the week. The precious metal recovered yesterday but still recorded a loss of nearly 1.1% for May and lost more than $100 from the near-record high recorded at the beginning of the month.

According to TG&VN at 9:25 p.m. on June 1 (Vietnam time), the gold price traded on Kitco floor was at 1,970.90 - 1,972.10 USD/ounce, up 8.5 USD compared to the previous session . The June gold futures price was last traded at 1,959.30 USD/ounce, down 0.23% on the day.

Investors are now waiting for further signals from the Senate on interest rate ceilings and the outlook for US interest rates, after the US Federal Reserve's policy meeting in June. However, the debt ceiling agreement passed by the House of Representatives has eased investors' concerns. Other information such as falling US government bond yields and relatively good employment data have also caused gold prices to fluctuate.

So while the gold market was only slightly volatile today, most Asia- Pacific stock markets rose, thanks to growing expectations that the Fed would not raise interest rates and that the US Congress would certainly pass a deal to raise the government's debt ceiling to prevent default.

Gold price today June 2, 2023: Gold price decreased due to selling pressure, investor sentiment was relieved, is gold likely to continue to decrease? (Source: FT)

Domestic gold prices fell after a good increase in the previous session. SJC gold prices are still over VND11 million per tael higher than international prices.

While the difference between the buying and selling price of jewelry gold remains high at VND950,000/tael. The difference between buying and selling SJC gold bars is VND600,000. Thus, jewelry gold buyers will immediately lose nearly VND1 million/tael.

Converting world gold price according to foreign exchange rate at Vietcombank: 1 USD = 23,660 VND, world gold price is equivalent to 56.01 million VND/tael, about 11 million VND/tael lower than SJC gold selling price at the same time.

Summary of SJC gold prices at major domestic trading brands at the closing time of the first day of June:

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: 66.50 - 67.05 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 55.52 - 56.42 million VND/tael; jewelry gold price is traded at 55.15 - 56.25 million VND/tael.

Gold's appeal will decline in the short term

In the short term, gold could trade higher, approaching $1,980 an ounce, said Brian Lan, an expert at Singapore-based GoldSilver Central . But he noted that a sharp increase in gold prices is unlikely, as the market is still speculating that the Fed will raise interest rates further, which would reduce the appeal of gold, a non-yielding safe-haven asset.

According to Clifford Bennett, chief economist at ACY Securities , the recent downward pressure on gold is due to expectations that the US debt ceiling crisis will eventually be resolved and that will remove support from the gold market in general.

Meanwhile, Ole Hansen, head of commodity strategy at Saxo Bank, said gold's three-week correction has ended and the market is on track to return above $2,000 an ounce even as weak commodity prices signal growing recession fears.

Hansen’s bullish outlook on gold comes as the Commodity Index has fallen 13% this year, led by silver, copper and oil. Meanwhile, gold prices have risen nearly 6% this year, last trading at $1,972.70 an ounce. While weak commodity prices could ease inflationary pressures in the near term, renewed safe-haven demand remains a healthy driver for gold, Hansen said.

The commodity market is in trouble because of the economic outlook, says analyst Ole Hansen. If the economy is as bad as commodities are pricing in, the Fed can’t raise rates indefinitely. “In this environment, gold could easily go back to $2,000 an ounce. We’re not out of the woods yet. Going back to $2,000 would definitely improve sentiment.”

Talking about the decline in gold prices in recent days, experts from Saxo Bank commented that gold prices have struggled to maintain their increase over the past 3 weeks, so a correction is inevitable.

Source