Gold prices continued to rise after ending a 10-session consecutive decline, amid investors assessing signals that the US may pursue a diplomatic approach aimed at ending the conflict in the Middle East.
Spot gold price was at 4,564.93 USD/ounce at 3:35 PM Vietnam time, after increasing by more than 2% at one point at the beginning of the session. Previously, this precious metal had hit a four-month low of 4,979.99 USD/ounce on Monday.
Gold futures for April delivery in the US increased 3.3% to 4,545.20 USD/ounce.
The weakening USD makes gold valued in greenbacks more attractive to investors holding other currencies.
In the short term, Mr. Christopher Wong - strategist at Oversea-Chinese Banking Corporation (OCBC) said that gold prices are likely still sensitive to expectations about the policy roadmap of the US Federal Reserve (Fed), the diễn biến of the USD and geopolitical factors. However, according to him, the recent recovery shows that downward corrections still tend to have supporting forces, unless real yields increase significantly.
Oil prices fell after US President Donald Trump said Washington was making progress in efforts to promote trade to end the conflict with Iran.
However, the Iranian military on Wednesday rejected President Donald Trump's statement that the US is conducting exchanges to end the conflict, saying Washington is "exchanging with itself".
In another development, the US manufacturing sector showed more positive signals than expected, with the PMI increasing to 52.4 from 51.6 in February. Experts previously predicted that this index would remain almost unchanged at 51.5.
The aggregated index shows that economic activity has fallen to its lowest level in 11 months.
The report stated: "The slowdown mainly comes from the service sector, where business activity grew at the weakest rate in 11 months due to a decrease in new order growth. In particular, exports decreased sharply. Slow growth and order decline, especially from foreign markets, are attributed to weakening confidence of both consumers and businesses.
According to CME Group's FedWatch tool, investors have lowered expectations about the possibility of the US Federal Reserve (Fed) raising interest rates in December to about 16%, compared to about 25% recorded on Friday earlier.
JPMorgan Bank said that although gold prices are currently still about 17% lower than before the conflict broke out in the context of the stronger USD and investors narrowing the level of risk in their portfolios, such adjustments in history are often seen as tactical accumulation opportunities.
