The global gold price remains steady at $2,030-2,040 per ounce as investors await important economic data from the US and interest rate signals from the Federal Reserve (Fed). In the domestic market, gold prices this morning (February 29) remain at record highs, while bullion prices reach 80 million dong/tael in some places.
At around 10 a.m., Phu Quy Group listed the price of Phu Quy 999.9 gold rings in Hanoi at 65.25 million dong/tael (buying) and 66.35 million dong/tael (selling). The round 999.9 gold rings of Rong Thang Long brand by Bao Tin Minh Chau Company have prices of 65.33 million dong/tael and 66.43 million dong/tael.
Compared to the end of yesterday afternoon, the price of gold rings in Phu Quy increased by 150,000 dong/tael, while the price of gold rings in Bao Tin Minh Chau remained unchanged. This is the record price level for gold rings, set as the price of gold rings has steadily increased in recent days, despite the relatively flat movement of the global gold price.
SJC bullion at the Hanoi market at the same time increased by 300,000 dong/tael compared to the end of yesterday afternoon. In Ho Chi Minh City, the price of bullion skyrocketed to 80 million dong/tael. While gold rings have shown stable price increases, the price of bullion has recently fluctuated significantly and not closely followed the international price trend.
Phu Quy listed the price of SJC bullion at 77.6 million dong/tael (buying) and 79.5 million dong/tael (selling). Bao Tin Minh Chau quoted the price of SJC bullion at 77.55 million dong/tael and 79.4 million dong/tael, respectively.
In Ho Chi Minh City, SJC Company quoted the price of bullion under the same brand at 78 million dong/tael and 80 million dong/tael. SJC rings have a price of 64.1 million dong/tael (buying) and 65.3-65.4 million dong/tael (selling) depending on the weight.
Gold traders said that the demand for gold has increased among the public after the Lunar New Year, not only during the God of Wealth Day, while the scarcity of gold supply is the reason for the strong breakthrough in domestic gold prices.
Spot gold price in the Asian market at around 10 a.m. Vietnamese time stood at $2,037 per ounce, up $2 per ounce compared to the previous trading session in New York, according to data from Kitco exchange. For the past few days, the gold price has been fluctuating weakly in the $2,030-2,040 per ounce range.
At this price level, the equivalent price of gold in Vietnamese dong is about 60.9 million dong/tael if converted at the selling exchange rate at Vietcombank. Compared to the converted global gold price, the retail price of SJC bullion is currently higher by 18.5-19.1 million dong/tael, while the price of gold rings is higher by about 4.5-5.5 million dong/tael.
The prospect of Fed interest rates is still the dominant factor affecting the gold price. Investors are waiting for the US Department of Commerce to release the Personal Consumption Expenditures (PCE) price index report – a inflation measure favored by the Federal Reserve – to get a better picture of the inflation situation and adjust expectations for the Fed’s interest rate cuts in 2024.
In a Reuters survey, economists forecast that the PCE index for January will increase by 0.3% compared to the previous month, after a 0.2% increase in December. If the figure shows higher inflation than expected, the market will continue to push back expectations for interest rates, and gold prices will face increased downward pressure.
“The timing of when the Fed will lower interest rates remains the dominant factor affecting the gold price. Gold prices could reach an all-time high if the Fed sends a clearer signal that interest rates are about to drop,” said Bob Haberkorn, a strategist at RJO Futures.
“Gold prices are currently holding back ahead of tomorrow’s data. If the inflation report is weaker than expected, gold prices could surpass the $2,050 per ounce level,” Mr. Haberkorn said.
Recently, after receiving hotter than expected Consumer Price Index (CPI) and Producer Prices Index (PPI) reports, investors no longer expect the Fed to cut interest rates in March and instead believe that interest rates won’t be cut until June. A higher interest rate environment for a longer period of time is not beneficial for an interest-bearing asset like gold.
In a speech on February 28, Fed Governor John Williams continued to express a cautious view on interest rate cuts. “The economy has taken an important step towards a more balanced state and the 2% inflation target, but we haven’t really reached it yet,” he said.
In addition to the risks from interest rate prospects, the global gold price is also facing downward pressure from continued selling of gold exchange-traded funds (ETFs). On February 28, the world’s largest gold ETF, SPDR Gold Trust, sold 2.3 tons of gold, reducing its holdings to 825.3 tons.
