Gold prices plummet from peak, has the bullish momentum run out?

12/05/2023 09:32 Nhat Linh Print article

ANTD.VN - After setting an all-time high, gold prices have turned to free fall as expectations for interest rate cuts are no longer as strong as before.

After strong increases last weekend and early this week, this morning, gold prices witnessed a retreat.

Saigon Jewelry Company (SJC) listed the opening price of SJC gold at 72.70 - 73.92 million VND/tael, down 300,000 VND/tael in both buying and selling prices compared to the previous session.

At DOJI , the decrease is 200 thousand per tael for buying, and 100 thousand per tael for selling, down to 72.70 - 74.20 million VND/tael.

Phu Quy SJC is also listed at 72.60 - 73.80 million VND/tael, down 350 thousand VND/tael for buying and down 400 thousand VND/tael for selling...

Similarly, non-SJC gold also adjusted quite strongly compared to the record price achieved in yesterday's session. PNJ gold this morning was listed at 61.20 - 62.30 million VND/tael, down 400 thousand VND/tael for buying, down 500 thousand VND/tael for selling.

SJC 99.99 gold ring is listed at 61.15 - 62.25 million VND/tael, down 500 thousand VND/tael...

Although the domestic gold price has dropped quite deeply, it is still not as significant as the decrease in the world gold price. After rising sharply, establishing an all-time high price of 2,135/ounce, the international gold price suddenly plummeted and lost more than 100 USD from this peak.

Giá vàng thế giới biến động mạnh trong phiên đêm qua (Kitco)

World gold prices fluctuated strongly last night (Kitco)

At the end of the trading session on December 4 (early this morning, Vietnam time), the world spot gold price stood at 2,029 USD, down 42 USD in the session and down 106 USD from the peak. This is the sharpest decline of gold since February.

Gold's upside momentum appears to have run out in the short term as interest rate cut expectations shift.

According to CME's FedWatch Tool, investors now rate the Fed's probability of a rate cut in March 2024 at 57%, down from 63% last week.

According to some experts, although the Fed is indeed moving closer to a policy shift, it is still too early to determine a specific time frame, so gold prices will find it difficult to maintain yesterday's peak. The market needs more catalysts, such as weaker US economic data.

The US dollar has also rallied on the interest rate expectations, putting pressure on gold. The US dollar index, which measures the greenback against a basket of six major currencies, rose 0.5% yesterday, making gold more expensive for buyers using other currencies.

Yields on 10-year US government bonds also rose, making non-coupon instruments like gold less attractive.

This week, investors are awaiting US jobs data, which will help them further assess the interest rate outlook.

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