World gold prices reached an all-time high in Wednesday’s trading session as the upward momentum continued, betting on the possibility of the Federal Reserve beginning to loosen monetary policy this year. In the domestic market this morning (7/3), gold prices also set a new record, with SJC gold bars exceeding 81 million dong/tael and gold rings reaching nearly 69 million dong/tael.
At nearly 9am, Phu Quy Group listed SJC gold prices for the Hanoi market at 79.3 million dong/tael (buying rate) and 81.3 million dong/tael (selling rate). Compared to the same time yesterday morning, SJC gold bar prices at this business increased by 300,000 dong/tael on each end of the price.
Plain round 999.9 gold rings from Phu Quy brand are priced at 67.5 million dong/tael and 68.8 million dong/tael, respectively, for buying and selling prices, increasing by 300,000 dong/tael on each end of the price.
Bao Tin Minh Chau Company quoted the price of Rong Thang Long plain round 999.9 gold rings at 67.63 million dong/tael and 68.83 million dong/tael, increasing by 200,000 dong/tael compared to yesterday morning.
In Ho Chi Minh City market, SJC Company quoted SJC gold bar prices at 79.3 million dong/tael and 81.3 million dong/tael for the same brand. SJC round rings are priced at 66.8 million dong/tael (buying rate) and 68-68.1 million dong/tael (selling rate) depending on the weight of the product.
At the same time, spot gold prices in the Asian market stood at $2,145.5/oz, down $3.4/oz, or a decrease of 0.16%, compared to the closing of the overnight session in New York. This price is equivalent to 64.2 million dong/tael if converted at the selling exchange rate in Vietcombank, an increase of 500,000 dong/tael compared to yesterday morning.
From the beginning of the week until now, converted world gold prices have increased by 2 million dong/tael, while domestic gold bar prices have only increased by 1.2-1.3 million dong/tael and gold ring prices have increased by about 1 million dong/tael. Thus, the gap between domestic and world gold prices is gradually narrowing.
Compared to the converted world gold price, the retail price of SJC gold bars is higher by 17.1 million dong/tael, while the price of gold rings is higher by 3.9-4.6 million dong/tael.
On Wednesday in the US, spot gold prices increased by about $14/oz, equivalent to an increase of nearly 0.7%, closing at $2,142/oz. In the session, the gold price reached $2,152/oz, the highest ever.
Gold prices received a new “boost” from the drop in the USD after Powell signaled that the Fed would cut interest rates this year.
In his first testimony before the US Congress, Fed Chairman Powell said the central bank could cut interest rates this year. However, he said the Fed is not ready to immediately cut interest rates but is waiting for more data showing downward pressure on inflation. “We believe that policy interest rates could have peaked in this tightening cycle. If the economy evolves as expected, the appropriate time to start withdrawing monetary policy tightening at some point this year may be appropriate,” he said.
After Wednesday’s testimony at the House Financial Committee, Powell will continue to have another appearance on Thursday before the Senate Banking Committee. This is the annual regular testimony on Fed monetary policy by the Fed Chairman.
The Dollar Index, measuring the strength of the USD against a basket of 6 other major currencies, closed below 103.4 points after the session, down from the previous session’s 103.9 points.
“Gold prices may increase further because optimism continues to dominate the market. However, investors may need some time to digest Powell’s statements as well as the US inflation report to be released on Friday,” independent precious metals trader Tai Wong in New York told Reuters.
According to data from the FedWatch Tool of the CME trading floor, traders are betting on a 70% chance of the Fed cutting interest rates in June.
Some experts expressed caution about the possibility of gold prices rising higher in the short term.
“There have certainly been macroeconomic data that have pushed gold prices higher, and on top of that is the expectation of policy changes from the Fed. However, the reaction in the gold market is much larger than what is reflected in long-term fair value models,” said analyst Michael Hsueh from Deutsche Bank.
The world’s largest gold exchange traded fund (ETF), SPDR Gold Trust, continued to sell off, selling more than 4 tons of gold in Wednesday’s session, reducing the holding volume to over 817.4 tons of gold. This week, the fund has sold off 6.3 tons of gold, after selling off 28 tons of gold in the previous 4 weeks.
