World gold prices opened the new trading week with a slight recovery after recording the strongest weekly decline in the past six weeks, amid investors continuing to monitor Middle East tensions and the outlook for US monetary policy.
As of 10:15 am Vietnam time, spot gold prices increased slightly by 0.27% to 4,024.50 USD/ounce. Meanwhile, August gold futures fell 1.27% to 4,030.05 USD/ounce.
Concerns about developments in the Middle East region quickly reflected in the energy market. Brent oil prices rose 2.44% to 90.23 USD/barrel, surpassing the 90 USD/barrel mark, while WTI oil rose 2.24% to 83.61 USD/barrel.
Rising energy prices raise concerns that inflationary pressure may last longer than expected. In that context, the market continues to maintain expectations that the US Federal Reserve (Fed) will keep interest rates at a high level for a long time, even not excluding the possibility of another wave of interest rate hikes if inflationary pressure increases.
According to data from the interest rate swap market, investors have now assessed the possibility that the Fed will raise interest rates at least once before the end of the year. Along with that, Fed Chairman of the Cleveland branch Beth Hammack is also in the group of Fed officials expressing the view that it is necessary to continue to be cautious with inflation.
High interest rates often reduce the attractiveness of gold because the precious metal does not generate yields. At the same time, the USD continued to maintain its upward momentum after two consecutive sessions, making gold more expensive for buyers holding other currencies.
In the opposite direction, speculative capital has not yet withdrawn from the gold market. The latest report from the US Commodity Futures Trading Commission (CFTC) shows that speculative funds have increased by 4,294 COMEX gold net buying contracts in the week ending July 14, raising total net buying positions to 119,147 contracts.
Meanwhile, the physical gold market in Asia is still quite quiet. In India, gold discounts have widened to the highest level in a month due to weakening jewelry demand and buyers expect prices to fall further. In China, insurance premiums are almost unchanged as retail buying power remains low.
Besides gold, other precious metals diễn biến trái chiều in the first session of the week. Spot silver price increased by 2.22% to 57.19 USD/ounce, platinum increased by 0.65% to 1,606.37 USD/ounce, while palladium decreased by 0.3% to 1,250 USD/ounce.
