The world gold price fell as the US dollar strengthened following a speech by Federal Reserve Chairman Jerome Powell on interest rate prospects. The domestic gold price this morning (February 6) increased to 78.5 million VND/tael, higher than the converted world gold price of 18.5 million VND/tael.
At around 10 a.m., Phu Quy Group listed SJC gold prices for the Hanoi market at 76.3 million VND/tael (buying) and 78.5 million VND/tael (selling). The Phu quy 999.9 smooth round ring is priced at 64.4 million VND/tael and 65.5 million VND/tael, corresponding to buying and selling prices.
In the Ho Chi Minh City market, SJC Company quoted gold prices for the same brand at 76.3 million VND/tael and 78.5 million VND/tael.
Compared to yesterday morning, the current SJC gold price has increased by about 500,000-600,000 VND/tael depending on the listings of each enterprise, while the gold ring price has decreased by 100,000 VND/tael or remained the same.
At the same time, the spot gold price in Asia stood at 2,026.7 USD/oz, an increase of 0.8 USD/oz compared to the closing price of the previous session in New York – according to data from the Kitco trading floor. This price is approximately equivalent to 60 million VND/tael if converted at the USD selling exchange rate at Vietcombank.
Compared to yesterday morning, the converted world gold price has decreased by about 300,000 VND/tael.
Compared to the converted world gold price, the retail SJC gold price is currently higher by 18.5 million VND/tael, while the gold ring price is higher by about 5.5 million VND/tael. The difference between domestic and world gold prices is increasing, as the domestic gold price decreases more slowly when the world price decreases and increases more quickly when the world price increases, even increasing when the world price decreases.
In the Monday session in the US, the spot gold price dropped by $14/oz, equivalent to a decrease of nearly 0.7%, compared to the previous weekend’s closing price, at 2,025.9 USD/oz.
The gold price dropped to the lowest level in over a week under pressure from the USD exchange rate and US Treasury bond yields, which also increased after the latest statement from the Fed Chairman.
The 10-year US Treasury bond yield at one point increased by 13 basis points, to 4.166%. Last week, the 10-year US Treasury bond yield fluctuated around the 3.81% threshold.
The Dollar Index, which measures the strength of the US dollar against a basket of 6 major currencies, increased by 0.5%, closing the session at 104.4 points, the highest in 12 weeks.
In a rare interview broadcast on CBS News on Sunday, Powell once again pushed back expectations that the central bank would soon cut interest rates. He said that it was time for the Fed to reduce interest rates, but the central bank still needed patience and insight in deciding when to lower interest rates. Additionally, he rejected the possibility of starting interest rate cuts in March, similar to the statement after the Fed’s regular meeting last week.
After Powell’s interview program, traders’ bets on the possibility of the Fed cutting interest rates in March continued to decrease, only to 16.5% – according to data from the CME trading floor’s FedWatch Tool.
In addition to Powell’s statement, expectations of the timing of rate cuts have also been pushed back by recent figures showing that the US economy remains strong, especially the January employment report released by the US Department of Labor last Friday.
“We are witnessing the impact of a strong jobs report. This report has pushed US Treasury bond yields and the USD exchange rate to higher levels, thereby putting pressure on gold prices,” said senior analyst Jim Wyckoff of Kitco Metals.
In addition, Minneapolis Fed branch President Neel Kashkari also said on Monday that the strength of the US economy and the possibility of higher neutral interest rates may mean that the Fed may have to wait longer before deciding to cut interest rates.
However, according to Wyckoff, the gold price will maintain the $2,000/oz threshold in the short term due to geopolitical tensions in the Middle East encouraging risk hedging demand.