The world gold price has reached $2,000/oz as the exchange rate of the US dollar and the US Treasury bond yields decrease after the US retail sales report. The domestic gold price this morning (16/2) reached 79 million VND/tael, showing the increasing heat of the domestic gold market before the God of Fortune day.
At over 9 am, Phu Quy Group listed the SJC gold price for the Hanoi market at 76.9 million VND/tael (buying) and 79 million VND/tael (selling).
Compared to the end of yesterday afternoon, the SJC gold price at this company has increased by 200,000 VND/tael in the buying direction and 300,000 VND/tael in the selling direction. However, compared to early morning yesterday, the SJC gold price at Phu Quy has increased by 450,000 VND/tael and 850,000 VND/tael, respectively.
The 999.9 pure gold ring of Phu Quy is priced at 64.55 million VND/tael and 65.75 million VND/tael, an increase of 150,000 VND/tael compared to the end of yesterday afternoon and an increase of 50,000 VND/tael compared to early morning yesterday.
In Ho Chi Minh City market, SJC Company listed the gold price for the SJC brand at 76.8 million VND/tael and 79 million VND/tael.
The domestic gold demand usually increases sharply after the lunar New Year, when many people buy gold for good luck on the God of Fortune day on the 10th day of the first lunar month. In recent years, the domestic gold price has usually increased more strongly than the international gold price on this occasion, and the gap between the buying and selling prices of gold has also widened more than usual.
Currently, the SJC retail gold price is higher than the converted international gold price by about 19.6 million VND/tael, while the international gap for gold rings is about 6.4 million VND/tael.
The price difference between buying and selling SJC gold is commonly around 2.1-2.2 million VND/tael. For gold rings, the common gap between the two prices is about 1.2 million VND/tael.
At over 9 am Vietnamese time, the spot gold price in the Asian market stood at $2,003.9/oz, down $1.1/oz, or 0.05%, compared to the closing price of Thursday’s session in the US market. At VCB, Vietcombank, this price is equivalent to about 59.4 million VND/tael, up 400,000 VND/tael compared to yesterday morning.
At the end of the night session in New York, the spot gold price increased by about $11/oz, equivalent to an increase of 0.5%, closing at $2,005/oz.
The world gold price has regained the key level of $2,000/oz after falling below this level in Tuesday’s session due to higher-than-expected US inflation data, which caused investors to reduce expectations for the US Federal Reserve to start cutting interest rates.
On Thursday, the gold price was supported by weaker-than-expected US retail sales data. According to a report from the US Department of Commerce, retail sales in January decreased by 0.8% compared to the same period last year, stronger than the forecasted decrease of 0.3% given by analysts. The December retail sales data has been revised to a 0.4% increase compared to the same period last year, lower than the preliminary figures.
After the above statistics were announced, the possibility of the Fed cutting interest rates early increased. Reflecting this shift in expectations, Treasury bond yields fell, with 10-year yields falling to 4.26%, from 4.33% in the previous session. The Dollar Index, which measures the strength of the US dollar, fell nearly 0.4%, closing at around 104.3 points.
Gold is an non-interest-bearing asset and is priced in US dollars, so falling bond yields and the US dollar exchange rate are a dual support for gold.
“Gold speculators jumped on the opportunity of weaker retail sales data to push prices back up to the $2,000/oz level,” said independent analyst Tai Wong in New York, in a statement to Reuters.
The price of gold is still dominated by the market’s expectations for the Fed’s path of interest rates. In this context, Chris Gaffey, Chairman of Global Market at EverBank, believes that the gold price will continue to face downward pressure in the short term until the Fed actually says it’s time to cut interest rates.
Currently, the most bet on by the market is the possibility of the Fed starting to cut interest rates in June.
In a statement on Wednesday, Fed Vice Chairman Michael Barr said the path to return inflation to the 2% target “may be uneven.” Meanwhile, Austan Goolsbee, President of the Chicago branch of the Fed, warned of the risks of delaying interest rate cuts for too long.
On Friday, investors’ focal point of attention will be another inflation report, the Producer Price Index (PPI) for January. In addition, there will be at least 3 more Fed officials speaking in the remaining time of this week.
