World gold prices on August 19 fell sharply, losing more than 1% as sell-offs in the bond market pushed yields up, while the USD recovered, creating double pressure on the precious metal.
As of 9:05 am Vietnam time, spot gold prices fell 1.41% to 4,354.76 USD/ounce, down 1.41%. December gold futures also fell 0.29%, to 4,407.80 USD/ounce.
After two consecutive increasing sessions, gold turned down sharply in the previous session and at one point lost nearly 2%. The downward momentum appeared when the US bond market was sold off, pushing yields up and supporting the USD recovery - two factors that are often disadvantageous to gold.
The yield of 30-year US government bonds in the August 18 session rose to a nearly two-decade high. High yields increased the opportunity cost of holding gold, which is an asset that does not yield yields.
Pressure on the precious metal also comes from the tense developments in the Strait of Hormuz, in the context that the US and Iran have not yet found common ground on the issue of controlling this strategic shipping route. Oil prices rose to a three-week high due to concerns about disruptions to energy supplies.
Before the conflict escalated, about 1/5 of global oil and liquefied natural gas was transported through the Strait of Hormuz. Rising energy prices could increase inflation risks, thereby strengthening the ability for interest rates to remain high for a longer time.
This week, the market continues to focus its attention on the minutes of the Fed's July monetary policy meeting to look for signals about interest rate prospects. Fed Chairman Kevin Warsh's upcoming statements at the Jackson Hole conference are also of particular interest to investors.
The sharp decrease occurred after gold just recovered from the 4,000 USD/ounce support zone, thanks to the return of buying power from investors and gold accumulation activities of central banks, including China.
On other precious metals markets, spot silver prices decreased by 0.35%, to 63,114 USD/ounce. Spot platinum prices increased 0.31%, to 1,721.90 USD/ounce, while palladium prices decreased 0.12%, to 1,287 USD/ounce.
In the energy market, oil prices continued to rise. Brent oil for October delivery increased by 0.66%, to 91.93 USD/barrel, while WTI oil increased by 1.14%, reaching 85.02 USD/barrel.
