World gold prices rose again in the afternoon trading session of July 14 after hitting a two-week low, as investors shifted their attention to the US inflation report and new signals about monetary policy from the US Federal Reserve (Fed).
As of 3:30 PM Vietnam time, spot gold prices increased by 0.6% to 4,022.95 USD/ounce, after falling to 3,983.29 USD/ounce at one point - the lowest level since July 1. August gold futures also increased by 0.58%, to 4,028.85 USD/ounce.
The recovery took place after gold prices fell about 3% in the previous session, the sharpest drop in more than a month. Selling pressure appeared as oil prices rose to a one-month high due to tensions in the Middle East, increasing concerns that inflation would drag on and forcing the Fed to continue to maintain tight monetary policy.
Fed Governor Christopher Waller said that the central bank may need to raise interest rates in the near future if economic data continues to show inflation remaining higher than the target of 2%.
According to the CME FedWatch tool, the market currently values about 76% of the possibility of the Fed raising interest rates at the September meeting, significantly higher than the 57% of a week ago. At the same time, the options market also reflects about 50% of the possibility of the Fed raising interest rates right at the July meeting, compared to below 10% previously.
This week, the focus of investors will be the US consumer price index (CPI) for June, followed by the producer price index (PPI) and the first semi-annual hearing before Congress by Fed Chairman Kevin Warsh. These data are expected to help the market more clearly define the Fed's interest rate outlook in the second half of the year.
Besides short-term factors, the outlook for the gold market is also being adjusted by major financial institutions. Recently, Bank of America lowered its forecast for the average gold price in 2026 by 14% to 4,360 USD/ounce, citing expectations that the Fed will maintain high interest rates for longer and the USD will continue to strengthen.
However, this bank still maintains a positive view on the long-term outlook for gold, and believes that the gold mining stock group is having an attractive valuation after a period of strong correction.
