Gold prices soared to a new record high during Tuesday’s trading session (September 24th), extending the recent upward trend amid escalating geopolitical tensions in the Middle East, which fueled demand for safe-haven assets. Additionally, gold prices were supported by growing expectations of further aggressive interest rate cuts by the US Federal Reserve during their November meeting.
At the close of trading in New York, spot gold rose by $28.9/oz compared to the previous session’s close, equivalent to a 1.1% increase, settling at $2,657.4/oz, according to data from the Kitco exchange.
As of 7 a.m. Vietnamese time today, spot gold prices in the Asian market climbed by $2.4/oz compared to the US session close, equivalent to a slight increase of nearly 0.1%, trading at $2,659.8/oz.
When converted using Vietcombank’s selling exchange rate, this global gold price corresponds to nearly VND 79.4 million/troy ounce, marking an increase of VND 900,000/troy ounce compared to yesterday morning’s rate.
The consecutive record-breaking prices are pushing global gold prices closer to the $2,700/oz mark, representing a 28% year-to-date gain. In addition to the Fed’s aggressive rate cut last week, gold prices have been bolstered by fears of a full-scale war in the Middle East.
On September 24th, an Israeli airstrike on Beirut, Lebanon, killed a senior Hezbollah militant. The intensified cross-border missile attacks between the two sides have raised concerns among observers about a potential all-out war. Escalating tensions could draw Iran closer to a direct conflict with Israel, as Iran backs both Hezbollah and Hamas – the Palestinian force currently engaged in warfare with Israel in the Gaza Strip.
Speaking to Reuters, senior strategist Bob Haberkorn of RJO Futures attributed the recent strong upward trend in gold prices to the “safe-haven demand due to Middle East worries.” According to Mr. Haberkorn, the market anticipates that Iran will retaliate against Israel, and as a result, “gold prices will reach new highs.”
The strategist predicted that gold prices could surpass the $2,700/oz threshold as early as this week if Middle East tensions intensify and bets on further Fed rate cuts increase.
In the futures market, traders are wagering on a 100% probability of the Fed cutting rates further in November. Specifically, there is a 58% likelihood of a 0.5 percentage point reduction and a nearly 42% chance of a 0.25 percentage point cut, according to data from the FedWatch Tool on the CME exchange.
Bets on a larger rate cut increased following the September 24th report by the Conference Board, which showed that US consumer confidence in September suffered its sharpest decline in more than three years. The consumer confidence index for September fell to 98.7 from 105.6 in August and fell short of the forecast of 104 predicted by economists in a Dow Jones poll.
Speaking on Tuesday, Chicago Fed President Austan Goolsbee signaled that the Fed may continue to cut rates into 2025.
In the remainder of this week, the market awaits statements from Fed Chairman Jerome Powell and US inflation data. The Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge, for August will be released by the US Department of Commerce on Friday.
Recent forecasts by major banks unanimously suggest that gold prices will continue to break records into 2025, driven by significant capital inflows into gold exchange-traded funds (ETFs) and expectations of accommodative monetary policies from major central banks, including the Fed.
The US dollar weakened considerably due to increased bets on the Fed opting for a more substantial rate cut in November. The Dollar Index closed Tuesday’s session at 100.47, down from 100.85 in the previous session. This morning, the index extended its losses, falling to 100.26 as of 7 a.m. Vietnamese time, according to data from MarketWatch.
Gold Prices Surge: SJC Gold Jumps 1.5 Million VND, Gold Rings Hit All-Time High
On the morning of September 24, domestic gold prices surged, witnessing a significant increase of up to VND 1.5 million per tael.
