What is causing gold prices to plummet?
Domestic SJC gold price is currently listed at 41.35 - 41.55 million VND/tael (buy - sell).
Gold prices fell sharply last week as investors worried about the future of the US-China trade war. However, gold still holds the support level of 1,450 USD/ounce.
Gold prices were hit hard after US President Donald Trump said he did not agree to delay the imposition of tariffs on Chinese goods. The news has backed US stock market expectations that the two countries have agreed to lift tariffs after a 'phase one' trade deal was signed.
Gold is already quite expensive than expected in the current market, especially after the Fed cut interest rates, said Nicky, an expert at Scotiabank. The $1,450/ounce mark is an important support level after the Fed cut interest rates for the first time on July 31, 2019".
Overall last week, gold prices fell by about 3%. Gold futures are trading at $1,463.20 an ounce, up 0.22% from before.
The US-China trade negotiation process is one of the biggest risk factors for the possibility of gold falling in the short term.
On November 7, Beijing said that the two countries had agreed to lift additional tariffs after President Trump and Chinese President Xi Jinping signed a temporary trade agreement for "phase".
However, President Trump soon denied lifting tariffs on China. The conflicting statements from the US House further demonstrate the unpredictable nature of US politics and trade. This further increases uncertainty and directly affects gold prices in the coming time.
What factors will affect gold prices next week?
Next week, the main driver for gold's price increase will be new developments in the US-China trade negotiation process. Then there is the event where Federal Reserve Chairman Jerome Powell will give a speech on the US economy to the National Assembly on November 13. Investors are also paying attention to President Donald Trump's speech at the New York Economic Club on November 12.
" jerome Powell's speech will attract great attention because it will be a sign of whether the Fed will continue to keep interest rates as they are now. With three consecutive interest rate cuts in 2019, it is unlikely that the Fed will continue to cut interest rates in the near future," said an expert.
If gold prices fall below $1,450/ounce, the market could trigger a sell-off.
The $1,450/ounce level is an important support level for gold. If gold falls below this important support level, investors will likely take a sell-off.
In the short term, world gold prices are forecast to trade in the range of 1,450 - 1,500 USD/ounce.
Inflation will be one of the key reports released this week as the Fed said it would not consider raising interest rates until inflation has improved significantly.
According to Kitco experts, it is unlikely that the Fed will cut interest rates in December 2019, but another cut is likely to take place in 2020.
