Gold prices surged as the Fed signaled a shift in policy.

December 14, 2023 10:39 AM Nhat Linh Print article

ANTD.VN - The Fed's decision to keep interest rates unchanged and forecast three cuts next year has lifted all the weight off the gold market, causing it to surge immediately.

This morning, domestic gold prices rose sharply across the board.

Specifically, as of 10:30 AM, Saigon Jewelry Company (SJC) listed the price of SJC branded gold at 73.40 - 74.62 million VND/ounce, an increase of 600,000 VND/ounce in both buying and selling prices compared to the closing price of yesterday's trading session.

At DOJI , the increase was 300,000 VND/ounce for buying and 400,000 VND/ounce for selling, bringing the price of SJC gold to 73.10 - 74.20 million VND/ounce. Phu Quy increased by 500,000 VND/ounce for buying and 600,000 VND/ounce for selling, listed at 73.40 - 74.40 million VND/ounce; Bao Tin Minh Chau also listed at 73.40 - 74.28 million VND/ounce…

Non-SJC gold prices saw even stronger increases, rising by 500,000 to 600,000 VND per tael. Specifically, PNJ gold was listed this morning at 60.50 - 61.60 million VND/tael; SJC 99.99 gold rings were at 60.50 - 61.55 million VND/tael; and Bao Tin Minh Chau's Thang Long Dragon Gold was at 61.02 - 62.12 million VND/tael…

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Gold prices are relieved of the burden of interest rates.

On the global market, at the close of trading on December 13th (early this morning Vietnam time), the spot gold price also surged, increasing by nearly $48 to $2,027 per ounce. Entering the Asian trading session, the precious metal continued its upward trend and is currently trading above $2,031 per ounce.

The main driver of gold prices is the US Federal Reserve's interest rate decision and its predictions of a significant shift in policy, the first since the start of the tightening cycle in March 2021.

Concluding its final FOMC meeting of the year, and as expected, the Fed kept the benchmark interest rate unchanged. They also released updated economic forecasts in their Summary of Economic Projections (SEP). The latest projections indicate that central bank officials are almost unanimous in anticipating interest rate cuts to begin next year, with expectations of three cuts totaling 0.75%, bringing the Fed funds rate down to around 4.6%.

Following this news, the US dollar fell sharply, with the USD Index, which measures the strength of the greenback against a basket of six major currencies, losing more than 1.1 percentage points to around 102.8 points. The sharp decline in the US dollar also reduced pressure on gold, as the two assets have an inverse correlation.

According to the CME FedWatch Tool, the market expects interest rates to move closer to 4% by the end of next year.

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