Gold prices await interest rate signals, “shark” SPDR Gold Trust continuously sells gold

The domestic price of gold reached nearly 79 million VND/tael for gold bars and a record 66 million VND/tael for gold rings ahead of the Tet holidays...


The global gold price is in a narrow range as investors await new signals from the US Federal Reserve, while the massive gold ETF, SPDR Gold Trust, continues to sell off. The domestic gold price before the Tet holiday reached nearly 79 million dong per tael for gold bars and a record 66 million dong per tael for gold rings.

At the close of trading on Wednesday in the New York market, spot gold fell about $2/oz, or about 0.1%, to $2,034.4/oz – according to data from Kitco.

According to Phillip Streible, Chief Strategist at Blue Line Futures, the gold price has paused as investors await clearer signals on interest rates from Fed officials. This week, nearly a dozen Fed officials will give their views on monetary policy. Next week, investor focus will turn to the Consumer Price Index (CPI) report – a key data point that will guide Fed policy decisions in the future.

Last week, Fed Chairman Jerome Powell signaled that investors would have to wait longer than expected for the first interest rate cut. Speaking on Wednesday, Minneapolis Fed President Neel Kashkari said he expected only 2-3 interest rate cuts from the Fed this year.

Two other officials said on Tuesday that if the US economy evolves as the Fed predicts, the central bank will be in a position to cut interest rates, but the current battle against inflation is not yet over.

Until recently, the market expected the Fed to start cutting interest rates in March and possibly make up to 6 cuts in the year. Currently, traders are betting heavily on the possibility of the Fed’s first rate cut in May or June.

Keeping interest rates high for an extended period will be detrimental to the gold price as gold is a non-yielding asset. However, some experts point out that gold has held steady above the important psychological level of $2,000/oz since the beginning of the year, which is a positive sign for long-term prospects.

In Wednesday’s session, both US treasury bond yields and the US dollar exchange rate fell, providing support for the gold price. However, the recent upward trend in yields and exchange rates has put pressure on the precious metal.

The Dollar Index, which measures the strength of the greenback against a basket of 6 other major currencies, closed below the 104.1 level, down from 104.2 in the previous session. At the beginning of the week, the index reached 104.4, the highest in 12 weeks.

The 10-year US treasury bond yield also fell to 4.11% from 4.17% in the previous session.

Gold price movements worldwide in the past 6 months. Unit: USD/oz – Source: TradingView.

As of 8am this morning in Vietnam time, spot gold in the Asian market stood at $2,038.2/oz, up $3.8/oz, or nearly 0.2%, from the close of the US session. This price is equivalent to about 60.3 million dong per tael if converted at the selling exchange rate at Vietcombank.

Compared to yesterday morning, the world gold price converted is now up by 100,000 dong per tael.

Vietcombank this morning quoted the USD at 24,200 dong (buying) and 24,570 dong (selling), up 30 dong at both ends compared to yesterday morning.

Before the Tet holiday, the domestic SJC gold price at the end of the afternoon of February 7, or the 28th day of the Lunar New Year, fluctuated around 76.7 million dong per tael (buying) and 78.9 million dong per tael (selling).

The 999.9 gold ring price ranged from 64.8-64.9 million dong per tael (buying) and 65.9-66 million dong per tael (selling). This is the highest price ever for 999.9 gold rings in the domestic market.

Compared to the converted world gold price, the retail gold price of SJC gold is currently higher by about 18.6 million dong per tael, while the gold ring price is higher by about 5.6-5.7 million dong per tael.

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