World gold prices fell sharply in the morning session of August 14, moving away from the 4,400 USD/ounce mark after hitting a 10-week high. Investors took profits and assessed the Fed's interest rate outlook.
As of 8:55 am Vietnam time, spot world gold prices fell 1.97%, to 4,319.75 USD/ounce, equivalent to a decrease of 86.88 USD/ounce in 24 hours. December gold futures contracts also fell 1%, to 4,376.25 USD/ounce.
Previously, gold prices had at one point increased to their highest level in about 10 weeks and recorded the second consecutive week of increase. However, the precious metal turned down sharply in the session of August 13 as profit-taking activity increased after a rapid recovery in recent days.
New US inflation data is becoming the focus of market attention. A report shows that production price pressure in July has cooled down, thereby reducing pressure on the Fed to pursue a tighter monetary policy.
The monetary market currently values the possibility of the Fed raising interest rates in the September meeting at around 1/3. Before this meeting, investors will continue to monitor data on the US labor market to better assess the direction of monetary policy.
The prospect of the Fed not continuing to raise interest rates is seen as a supporting factor for gold, because the precious metal does not bring yields. When interest rate expectations weaken, the opportunity cost of holding gold also decreases.
However, maintaining high interest rates for a long time can still put pressure on gold prices, as profitable assets such as bonds become more attractive.
The recovery momentum of gold in recent weeks has also been supported by the return of investment demand and gold buying activities by central banks. Before the latest adjustment, gold prices once surpassed the 100-day moving average for the first time since April, but then fell back below this technical threshold.
Mr. Christopher Wong, strategist at OCBC, said that the macroeconomic context has become more positive for gold, but investor holdings and technical momentum are less favorable after a strong recovery.
According to this expert, the risk of adjustment and accumulation is still present around the current price ranges.
On the precious metals market, spot silver price also decreased 0.91% to 63.88 USD/ounce. Platinum prices fell 0.63% to $1,707.99/ounce, while palladium prices fell 0.63% to $1,304/ounce.
At the same time, the energy market also went down. Brent oil price decreased by 0.26% to 86.75 USD/barrel, while WTI oil decreased by 0.49% to 80.85 USD/barrel.
