Gold Prices End Q2 With a Gain of Over 4%
Gold spot prices on Friday (June 28), the last trading day of June, were quoted at $2,326.47 per ounce, with a quarterly gain of over 4%. Gold futures reference (August delivery) was quoted at $2,339.60 per ounce.
The world gold market in Q2 2024 fluctuated mainly based on the ‘health’ of the US economy, especially the inflation situation. In addition, analysts believe that the price increase in the past quarter was also due to some other factors.
Domestically, SJC gold bar prices ended Q2 at VND 74.98 – 76.98 million/tael (buying-selling), down from VND 78.3 – 80.82 million/tael at the end of Q1/2024.
Gold price movements.
US Inflation Cools Down
US inflation is showing a downward trend, raising expectations for an early interest rate adjustment.
The US Personal Consumption Expenditure (PCE) Index for May remained unchanged for the first time since November 2023. Specifically, the PCE for May was unchanged from April and up 2.6% year-on-year, down from 2.7% in the previous month. Excluding food and energy prices, core inflation rose 0.1% from April, the smallest increase since spring 2020. Compared to the same period last year, this index increased by 2.6%, the lowest in more than three years.
Immediately after viewing the May inflation data, San Francisco Fed President Mary Daly – also a member of the Federal Open Market Committee in 2024 – said the latest inflation data was “good news that the policy is working.”
The Fed is currently adjusting interest rates based on economic data, mainly inflation. The erratic inflation over the past time has led to fluctuations in the market’s forecast of the timing of the Fed’s interest rate hike. At present, the market expects the Fed to cut interest rates in September 2024 and then again in December 2024. According to the CME FedWatch tool, traders currently predict a 68% chance of a Fed rate cut in September, up from 64% before the US Department of Commerce announced inflation data.
US inflation index.
In addition, the active gold purchases by central banks, especially China, have also supported gold prices, along with geopolitical tensions in many parts of the world. Gold’s role as a reliable investment asset has been enhanced by its historical performance as a store of value during economic recessions and geopolitical instability.
With global economic indicators signaling potential headwinds and central banks considering policy adjustments, gold stands out as a strategic hedge against inflation and currency fluctuations.
However, as with any investment decision, careful consideration of personal financial goals, risk tolerance, and market conditions is essential.
Gold Price Outlook for the First Week of Q3 2024
The latest Kitco News survey shows that most industry experts plan to stay out of the market during this period, while retail investors have different predictions about the short-term outlook for gold.
Last week, 12 Wall Street analysts participated in the Kitco News Gold Market Survey for the first week of July, and they unanimously agreed to suspend their outlook. Accordingly, 4 experts, or 33%, predicted that prices would rise in the week of July 1-5, 2024; 2 analysts (17%) predicted that prices would fall, and the remaining 6 (50%) did not want to make a prediction.
Meanwhile, 178 retail investors on Main Street participated in the online survey. Of these, 86 people, or 48%, predicted that gold prices would rise in the coming week; 50 others, or 28%, predicted that prices would fall; while the remaining 42, or 24%, expected prices to remain stable this week.
Alex Kuptsikevich, a senior market analyst at FxPro, is among the experts who predict a decline in gold prices after falling below the 50-day moving average.
Mr. Kuptsikevich said, “Gold and the markets with it may be at a crossroads between weak economic data (slowing growth and weak inflation) and the Fed not showing a dovish stance.” “This is the worst combination for risky asset demand and could trigger a broad sell-off, including gold.”
Marc Chandler, CEO of Bannockburn Global Forex, on the other hand, expects gold prices to rise in the first week of July after stabilizing in the previous week. He wrote, “Gold rebounded from below $2,300 on Wednesday to Thursday last week and returned to $2,340 at the end of the week. The fact that it has regained all of last week’s losses is enough to extend gold’s rally…Since the end of Q3 2023, it has only had 1 down month (January 2024).”
Currently, he believes gold is ready for a further recovery in the coming days. He said, “Moving above the $2,350-2,360/ounce level will be uplifting and could signal a return to the $2,400 level.” “Two macro developments that could support gold prices are the results of the first round of the French election and the US jobs report.”
“Prices will rise,” said James Stanley, a senior market strategist at Forex.com. “I think there are still a lot of opportunities to lose at this point.”
Darin Newsom, a senior analyst at Barchart.com, is also optimistic about gold prices in the first week of July.
Kevin Grady, president of Phoenix Futures and Options, said the coming week could see thin markets, but that also means a higher risk of volatility. “I really think there will be some volatility depending on how the numbers turn out. It’s going to be interesting because it’s a holiday week with a lot of data coming out. I think it will be a pretty quiet week.” Mr. Grady acknowledged that in this environment, geopolitical developments such as the escalation in Ukraine or the Middle East could disrupt the market very quickly.
Kitco News survey predicts gold prices.
With the upcoming US Independence Day holiday, this week is unusual for economic data, with important figures released before and after the holiday. On Monday (July 1), markets will receive the ISM Manufacturing PMI, followed by the Eurozone CPI flash estimate and US JOLTS Job Opportunities on Tuesday (July 2). ECB President Christine Lagarde and Fed Chairman Jerome Powell will also speak at a central bank conference in Portugal.
Then, on Wednesday (July 3), markets will watch employment data, weekly unemployment figures, and the US Department of Labor’s Services PMI, along with the FOMC’s June meeting minutes.
After the July 4 holiday on Thursday, traders will welcome the US June non-farm payrolls report on Friday morning (July 5).
Reference: Kitco News
Which bank offers the highest interest rate for online savings in early February 2024?
Beginning February 1st, 2024, several banks have been adjusting their interest rates downwards for savings accounts ranging from 1 to 24 months. Based on a survey conducted across 16 banks, the highest annual interest rate for online savings deposits at a 6-month term is 5%, while for a 12-month term, it is 5.35%.
