World gold prices continued to adjust in the trading session on July 7, as investors turned their attention to the minutes of the June monetary policy meeting of the US Federal Reserve (Fed), while monitoring new developments in the Strait of Hormuz and the energy market.
As of about 11:04 am Vietnam time, spot gold prices fell 0.38% to 4,132.42 USD/ounce, after falling to nearly 4,125 USD/ounce at one point. This is the second consecutive declining session for the precious metal, after losing about 0.3% in the previous session.
Despite the adjustment, gold prices still maintained above the psychological level of 4,000 USD/ounce after recording the first week of increase since the end of May. Compared to the peak of more than 5,500 USD/ounce set at the beginning of the year, the precious metal price has now decreased by more than 25%.
The focus of the market this week is the minutes of the monetary policy meeting on June 16-17 of the Fed, expected to be released on July 9 (Vietnam time). Investors expect this document to provide more clues about the operating views of policymakers after the decision to keep interest rates unchanged at 3.50%–3.75% at the June meeting.
Expectations for the interest rate roadmap have also changed after the US jobs report released last week was lower than forecast. According to the CME FedWatch tool, the probability of the Fed raising interest rates at the September meeting is currently around 56%, down from over 60% before the data was released.
Meanwhile, the Bloomberg Dollar Spot Index is almost flat, while the yield of 10-year US government bonds fluctuates around 4.48–4.50%. These continue to be important variables dominating the diễn biến of the gold market.
Geopolitical factors have also not cooled down as the Hormuz Strait area continues to record incidents affecting maritime transport activities, increasing concerns about the security of key oil and natural gas transport routes in the world.
However, oil prices are still significantly lower than the previous period of escalating tensions. In the trading session on July 7, Brent oil increased by 0.71% to 72.50 USD/barrel, while WTI oil increased by 0.63% to 68.98 USD/barrel. The oil market is currently interspersedly affected by the gradual improvement of ship traffic through the Strait of Hormuz and OPEC+'s production increase plan.
From a macroeconomic perspective, newly released data shows that the activity of the US economy remains stable. The PMI index of the service sector announced by ISM reached 54.0 points in June; in which, the business activity index reached 55.4 points, new orders reached 55.1 points and employment was at 51.2 points.
On the precious metals market, silver prices fell to about 61.51 USD/ounce. Platinum prices remained almost flat, while palladium slightly increased.
In another development, Hong Kong (China) put into operation a centralized clearing system for gold and restored gold futures contract trading.
This move is part of the strategy to develop Hong Kong (China) into a gold reserve and trading center in the region.
