Gold comes under selling pressure as the US dollar strengthens.

January 24, 2024 11:44 Nhat Linh Print article

ANTD.VN - Hedge funds began increasing their short positions in the early days of the year, as gold prices came under pressure from the strength of the US dollar.

Domestic gold prices continued their upward trend this morning, although the increase was not very significant. At 9:30 AM, Saigon Jewelry Company (SJC) listed the price of gold bars at 74.20 - 76.70 million VND/ounce, an increase of 200,000 VND/ounce in both buying and selling prices compared to the closing price yesterday.

The increase of 200,000 VND per tael is also being applied by most domestic gold trading businesses at the beginning of the morning.

Accordingly, Phu Nhuan Jewelry Company (PNJ) listed the price of SJC gold bars at 74.20 – 76.70 million VND/ounce. DOJI Group listed it at 74.15 – 76.65 million VND/ounce; Phu Quy SJC at 74.20 – 76.60 million VND/ounce; Bao Tin Minh Chau at 74.20 – 76.85 million VND/ounce…

Gold prices are under pressure from the US dollar.

Meanwhile, non-SJC gold prices tended to remain unchanged compared to the previous closing session.

Specifically, SJC 99.99 gold rings are listed at 62.85 – 64.05 million VND/ounce; PNJ gold is listed this morning at 62.85 – 64.10 million VND/ounce; Bao Tin Minh Chau's Thang Long Dragon gold is 63.83 – 64.93 million VND/ounce…

Globally , gold prices have been relatively stable in recent sessions. Currently, spot gold is trading around $2,025 per ounce, approximately $2 higher than at the same time yesterday.

According to the latest data, gold is under technical selling pressure amid expectations of interest rate changes related to when the US Federal Reserve (Fed) will cut interest rates for the first time in the upcoming easing cycle. In particular, hedge funds have begun increasing their short positions, according to the latest trading data from the US Commodity Futures Trading Commission (CFTC).

This has been a disappointing start to the year for precious metals investors, as most had predicted a strong industry-wide recovery in 2024. But the dollar's rebound since late December has continued to put downward pressure on gold prices.

The CFTC's Disaggregated Commitment of Traders report for the week ending January 16th showed that money managers reduced their total speculative long positions in Comex gold futures by 3,402 contracts to 130,931. At the same time, short positions increased by 1,828 contracts to 47,702 contracts. Thus, the gold market maintained a net long position of 83,229 contracts.

According to experts, the somewhat hawkish comments from Fed officials have prompted investors to aggressively reduce their gold long positions.

In addition, strong economic data last week pushed market expectations for a March interest rate cut down to 50/50, a significant drop from the 80% probability priced in the previous week.

Despite the headwinds, some analysts continue to see upside potential for the precious metal. Geopolitical uncertainties stemming from ongoing turmoil in the Middle East and concerns about an economic recession continue to support gold prices in the long term.

In a recent report, JPMorgan also believes that the medium-term outlook for gold throughout 2024 and into the first half of 2025 remains quite positive.

Experts believe any price drops in the coming months will be seen as a buying opportunity ahead of a potential breakout recovery that JPMorgan anticipates will begin in mid-2024 as US GDP growth slows.

Source link