Gold prices rose in the first trading session of the week as the USD weakened, although the increase was limited by energy price movements and expectations of cautious monetary policy in the US.
Spot gold prices rose 0.8% to 4,522.14 USD/ounce in this afternoon's trading session Vietnam time, after a period of decreasing by about 1% earlier in the session. US gold futures for April delivery rose 0.7% to 4,556.70 USD/ounce.
The weakening USD helps commodities valued in the greenback become more attractive to investors holding other currencies.
Mr. Nicholas Frappell - Global Organization Markets Director at ABC Refinery said that the gold price diễn biến last week, when ending a three-week consecutive decline, showed a technical response after a period of deep decline and may open up the possibility of recent trend reversals. However, according to him, diễn biến this week will play a role in more clearly confirming the next trend, in the context of the market being strongly affected by the continuous news flow.
Brent oil prices rose above 115 USD/barrel after Houthi forces in Yemen launched attacks on Israel over the weekend, causing the scope of the conflict to continue to expand.
According to CME Group's FedWatch tool, the market currently assesses the possibility that the US Federal Reserve (Fed) will cut interest rates this year as very low, contrary to expectations before the conflict broke out when investors once predicted that there might be two interest rate cuts.
The market is currently awaiting Fed Chairman Jerome Powell's speech at an event at Harvard University on the same day, along with the speech of New York Fed Chairman John Williams.
Since the beginning of the month, gold prices have fallen more than 14% – the strongest monthly decrease since October 2008 in the context of the USD rising more than 2% since the conflict between the US-Israel and Iran began on February 28. However, the precious metal has still increased by about 5% since the beginning of the quarter.
Mr. Nicholas Frappell said that the recent adjustment of gold prices mainly reflects a significant change in interest rate policy expectations, thereby supporting the upward momentum of the USD.
Meanwhile, spot silver price increased 1.5% to 70.61 USD/ounce. Platinum rose 3.4% to $1,925.85 an ounce and palladium rose 3% to $1,417.75 an ounce.
