Precious metals plunge

Spot gold fell $33 to $1,813 an ounce. Gold futures last traded at $1,820 an ounce, down $34.6 from a day earlier.

The world's precious metal lost 2% on the day as investors feared interest rates would rise higher than previously expected following remarks by US Federal Reserve Chairman Jerome Powell before the US Senate Banking Committee.

In addition to the higher-than-expected rate hike, Mr. Powell also pointed to the possibility of faster rate hikes. He suggested that the Fed could return to 50 basis point increases after slowing to a 25 basis point increase in February.

Gold price today March 9: Precious metal plummets - 1

“ The latest economic data is stronger than expected, which suggests that the final rate may be higher than previously anticipated. If the overall data indicate that a more rapid tightening is warranted, then we will be prepared to accelerate the pace of rate increases,” the head of the world’s most powerful central bank said .

Gold price movements today

+ Domestic gold price

At 3:00 p.m. on March 8, the gold price at Doji was listed at 65.8 - 66.5 million VND/tael (buy - sell), down 200,000 VND/tael for buying and down 100,000 VND/tael for selling compared to the previous session.

Meanwhile, the buying price of gold at SJC is 65.8 million VND/tael, the selling price is 66.5 million VND/tael, also down 200,000 VND/tael in both buying and selling directions.

The price of jewelry gold and 24K gold rings of all kinds is traded around 51.67 - 53.9 million VND/tael.

+ International gold price

At the same time, the world gold price listed on Kitco was at 1,813 USD/ounce, down 33 USD/ounce compared to the previous trading session. The gold futures price for April delivery on the Comex New York floor was at 1,816.7 USD/ounce, down 28.3 USD/ounce.

Previously, on the night of March 7 (Vietnam time), the world spot gold price stood at around 1,840 USD/ounce. Gold for April delivery on the Comex New York floor was at 1,845 USD/ounce.

Gold Price Forecast

Higher inflation data due next week will be enough to push the Fed back toward a half-percentage-point hike later this month, said Bill Adams, chief economist at Comerica Bank. " Financial markets are pricing in about a 50-50 chance that the Fed will raise its target rate to above 5.5% in the second half of this year," he said.

With the Fed maintaining such an aggressive policy stance, some economists are predicting a hard landing for the world's leading economy later this year, citing the lag in monetary policy.

The economy has yet to feel the full impact of the most aggressive tightening of monetary policy in more than 40 years, said James Knightley, chief international economist at ING. Rising interest rates will severely impact the cost and availability of borrowing, which could lead to a harder landing, he said.

Traders and investors are now eagerly awaiting the monthly employment report from the US Department of Labor due out Friday morning. The report is expected to show an increase of 225,000 jobs in February, following a “huge” increase of 517,000 jobs in January.

A strong jobs report, coupled with Fed Chairman Powell's hawkish comments, could spell trouble for gold, said FXTM senior research analyst Lukman Otunuga. Otunuga did not rule out the possibility of gold testing $1,800 an ounce again.

Inflation is a dangerous problem now and the Fed needs to raise interest rates to around 6% (from the current 4.75%/year) before inflation can cool down and this will hurt the economy.

Once the Fed raises interest rates sharply, the USD is expected to increase in value, thereby causing gold prices to fall sharply.

Still, the possibility of a hard landing could put pressure on Fed Chairman Jerome Powell, who may have to consider the possibility more carefully and ease monetary policy.

Gold prices continue to be quite volatile in the short term. It all depends on the Fed's policies and the strength of the USD.

According to a recent survey, gold prices will average $1,860 per ounce in 2023. The lowest is forecast to be below $1,600 per ounce and the highest is $2,025 per ounce.

In the long term, gold is expected to increase amid the downtrend of the USD after the Fed ends its long-term interest rate hike cycle.

Cong Hieu

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