Gold prices dipped overnight on Thursday before rebounding in the morning session as investors digested the latest developments in President Donald Trump’s trade war and awaited his announcement of the next Federal Reserve Chair. The SPDR Gold Trust ETF witnessed a notable shift from consecutive buying sessions to a substantial sell-off.
As of 9 a.m. Vietnam time, spot gold prices in Asian markets rose by $9.5/oz compared to the previous close in New York, representing a 0.28% increase. The price stood at $3,379.7/oz, according to Kitco data. When converted using Vietcombank’s USD selling rate, this equates to approximately VND 107.5 million per tael, a decrease of VND 200,000 per tael compared to the previous day’s morning session.
At the same time, Vietcombank quoted USD exchange rates at VND 26,020 (buying) and VND 26,410 (selling), a decrease of VND 10 for both rates compared to the previous day.
On Wednesday’s New York session, gold prices settled at $3,370.2/oz, marking an $11.2/oz or 0.33% decline from the previous close.
The pullback in gold prices during the Wednesday session was attributed to profit-taking by investors following the precious metal’s surge to a two-week high in the prior session. Gold prices remained under pressure even as the US dollar weakened significantly, with the Dollar Index closing at 98.18, down 0.6% from the previous session.
However, the decline in gold prices was limited by mounting expectations of an interest rate cut by the US Federal Reserve during their upcoming meeting. Markets are pricing in a 95.2% probability of a 0.25% rate cut in September, up from nearly 93% in the previous session and a significant jump from just 47% a week ago, according to the FedWatch Tool from CME Group. Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, also commented that the Fed might need to lower rates in the near term to counter a slowing economy.
Risk appetite among investors shifted back into focus during the Thursday morning session, propelling gold prices higher amidst new developments in the ongoing trade war.
On Wednesday, President Trump announced an additional 25% tariff on imports from India as a punitive measure for their purchases of Russian oil, bringing the total tariff rate to 50%. Furthermore, he imposed a 100% tariff on certain imported chips. These new tariff measures, announced by Trump at the end of July, came into effect at midnight on August 7, Eastern Time.
Analysts suggest that a mix of conflicting factors is causing gold prices to stagnate below the key level of $3,400/oz.
“We believe this is a mild pullback in the gold market as investors take profits after the recent rally. With fewer critical economic data releases this week and a slight easing in risk aversion, the market is taking a breather,” said David Meger, a trader at High Ridge Futures, in a report.
Investors are also awaiting President Trump’s announcement of his nominee for the Fed Chair position, currently held by Jerome Powell, whose term ends in May 2026. Trump stated on Tuesday that he would reveal his choice for the role later this week.
Another factor capturing the attention of global investors is Trump’s efforts to end the war in Ukraine. On Tuesday, the President claimed that US envoy Steve Witkoff had made “great progress” in talks with Russian President Vladimir Putin about ending the conflict. “Everyone agrees that the war must be ended, and we will work towards that end over the coming days and weeks,” Trump stated, without providing further details. Additionally, a White House official told CNBC that Trump might meet with Russian President Vladimir Putin as early as next week.
Should the peace process for Ukraine advance, the demand for gold as a geopolitical risk hedge could diminish.
The world’s largest gold-backed ETF, SPDR Gold Trust, offloaded 3.1 tons of gold during the Wednesday session, reducing its holdings to 952.8 tons. Prior to this, the fund had accumulated 2.8 tons of gold over the first two days of the week.
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