Gold prices rose in Tuesday's trading session, but are still heading for their strongest monthly decline in more than 17 years, as investors shift to holding the USD – a priority asset in the context of prolonged conflict in the Middle East.
Spot gold prices rose 0.9% to 4,568.68 USD/ounce at 3:25 PM Vietnam time. US gold futures for April delivery rose 0.5% to 4,580.70 USD/ounce.
Since the beginning of the month, gold prices have decreased by more than 13%, heading towards the strongest decrease since October 2008. However, for the whole quarter, the precious metal still increased by about 5%, after setting a historical peak of 5,594.82 USD/ounce on January 29. Currently, the price has decreased by about 18.7% compared to this peak.
Mr. Tim Waterer - Head of Market Analysis at KCM Trade said that in the current price range, many investors still see gold as an asset with accumulated value after a strong correction in recent months. The downward trend of oil prices, a slight weakening USD and a more attractive price level have supported the recovery momentum of the precious metal in the most recent session.
In the context of prolonged conflict, the USD is heading towards its strongest monthly increase since July, continuing to be seen as a prioritized shelter channel thanks to the US position in the energy market and the increasing trend of cash holding demand during a volatile period.
According to data from CME Group's FedWatch tool, the market is currently almost no longer expecting the US Federal Reserve (Fed) to cut interest rates this year, a significant change compared to forecasts before the conflict broke out.
Mr. Waterer said that if the Hormuz Strait continues to be disrupted by energy transportation, it could affect the developments of the gold market in the near future.
Meanwhile, Goldman Sachs still maintains a positive view of the long-term outlook for the precious metal, forecasting that gold prices could reach about 5,400 USD/ounce by the end of 2026, in the context that central banks continue to diversify reserves and global monetary conditions may gradually become more favorable.
On the other precious metal market, spot silver prices increased by 2.7% to 71.89 USD/ounce; platinum increased by 1% to 1,917.49 USD/ounce; palladium increased by 1.5% to 1,427 USD/ounce. However, all three metals still decreased by about 20% in March.
