World gold prices suddenly fell in the afternoon trading session of August 18, under pressure from the upward momentum of US Treasury bond yields and oil prices. Investors are also cautious before the Fed releases the minutes of the July policy meeting.
As of 3:50 p.m. on August 18 (Vietnam time), world gold price decreased by 0.55% to 4,392.1 USD/ounce. Silver prices fell 1.29% to 64.82 USD/ounce.
The yield on 10-year US Treasury bonds continues to increase. This development increases the opportunity cost of holding gold - an asset that does not yield yields.
In addition, rising oil prices amid tensions in the Middle East continue to worry the market about energy supply prospects.
In the coming time, oil prices will continue to be one of the important factors putting pressure on gold as the situation in the Middle East is still uncertain.
In addition, traders' expectations for the Fed's interest rate policy will also play an important role in gold price movements in the coming time. Investors are also paying more attention to important technical thresholds in the market.
High energy prices can increase concerns about inflation, thereby strengthening expectations that interest rates will remain high. Although gold is often seen as an inflation hedging tool, a high interest rate environment reduces the attractiveness of precious metals because gold does not generate profits.
However, market expectations for the Fed's September interest rate decision have changed significantly after a series of US economic data.
After the July jobs data unexpectedly fell, consumer inflation was lower than forecast and retail sales were weaker than expected, the market is currently leaning more towards the possibility that the Fed will keep interest rates unchanged. The probability that the Fed will not change interest rates in the September meeting is valued at nearly 65%.
Investors are currently waiting for the minutes of the Fed's most recent policy meeting, expected to be released on August 19. The minutes may provide more signals about the views of Fed officials on the outlook for inflation, economic growth and interest rate orientation in the coming time.
Technically, spot gold prices may test the support zone around 4,381 USD/ounce. If this threshold is broken, gold prices may retreat to the 4,320-4,351 USD/ounce zone.
On the precious metals market, spot silver price decreased 0.7%, to 65.32 USD/ounce. Platinum prices decreased 0.6%, to 1,759.63 USD/ounce, while palladium decreased 0.6%, to 1,325.47 USD/ounce.
The article updates market developments, not investment recommendations. Investors need to consider before deciding.
