Gold prices plunged today amid news that US government debt extension talks will resume.
Previously, world gold prices had a modest increase thanks to safe-haven demand in the context of the approaching time of debt default while recent negotiations remained at a standstill.
President Joe Biden and House Speaker McCarthy have made little progress in talks to extend the US debt ceiling, with Treasury Secretary Janet Yellen reiterating this week that the US government could run out of money to meet its financial obligations and risk defaulting on its debt if a new debt-ceiling extension is not reached.
Gold prices today suddenly plummeted.
One important piece of information the market is waiting for this week is the minutes of the Federal Open Market Committee (FOMC) May policy meeting. However, precious metals seem to have little reaction to this event.
Gold price movements today
+ Domestic gold price
At 6:30 a.m. on May 25, the gold price at Doji was listed at 66.45 - 67.05 million VND/tael (buy - sell), down 50,000 VND/tael (sell) compared to the same time yesterday.
Meanwhile, the gold price at SJC was listed at 66.5-67.1 million VND/tael (buy - sell), down 100,000 VND/tael in both directions compared to yesterday afternoon.
The price of gold rings and jewelry of all kinds is traded around 53.65 - 55.9 million VND/tael.
+ International gold price
The world gold price listed on Kitco is at 1,960 USD/ounce, down 16 USD/ounce compared to early this morning. Gold futures last traded at 1,970 USD/ounce.
Gold Price Forecast
Demand for gold is rising even as some Federal Reserve officials remain hawkish. St. Louis Fed President James Bullard expects the central bank to raise interest rates two more times to rein in inflation in 2023.
According to Mr. Bullard, the probability of a recession has been “overstated.” The risk of a US recession is not as high as Wall Street forecasts.
In the medium and long term, the USD is under pressure to decrease when the Fed inevitably has to reverse its monetary policy after more than a year of raising interest rates at a rare pace. The Fed has raised interest rates 10 times, a total of 475 basis points.
Once the Fed reverses its policy, the USD will fall rapidly and thereby have a positive impact on gold.
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