World gold prices rose in the afternoon trading session of August 28, returning above the 4,600 USD/ounce mark as the market waited for the speech of US Federal Reserve (Fed) Chairman Kevin Warsh at the Jackson Hole seminar.
As of 1:58 PM on August 28th Vietnam time, spot gold prices increased by 0.19% to 4,610.57 USD/ounce. Meanwhile, December gold futures slightly decreased by 0.02% to 4,662.90 USD/ounce.
Previously, spot gold prices were at times under adjustment pressure as investors were cautious about signals of US inflation and interest rates. The precious metal once hit a 3-month high of 4,696.18 USD/ounce in the first session of the week, after the US Treasury Department announced support measures for long-term bonds.
The focus of the market is currently the speech of Fed Chairman Kevin Warsh at Jackson Hole. Investors are looking for more clues about the direction of US monetary policy, especially in the context that inflation is still higher than the Fed's target of 2%.
Fed officials expressed concern about the inflation outlook in their pre-conference statements. Data released this week also showed that the Personal Consumption Price Index (PCE) - a measure of inflation of particular interest to the Fed - increased by 3.7% in 12 months up to July.
High interest rates often put pressure on gold prices because precious metals do not generate yields. Conversely, expectations of the Fed easing policy may reduce bond yields and the attractiveness of the USD, thereby supporting cash flow into gold.
According to Matt Simpson - senior analyst at StoneX - the possibility of Fed Chairman Kevin Warsh giving a tough stance on monetary policy is being rated higher than the possibility that he is sending a soft signal. This may cause gold prices to continue to adjust from the peak in the short term.
However, this expert believes that any decline can be missed by investors in the early stages of the price increase as an opportunity to buy, especially when the target of 5,000 USD/ounce is still being targeted by the market.
Besides monetary policy factors, gold continues to receive support from cash flow into ETFs and futures contracts, along with concerns about the US fiscal situation and official sector gold buying activities.
According to experts, the fact that gold prices maintain above important moving averages shows that the technical trend is still relatively positive. However, the area of 4,655–4,700 USD/ounce is being considered a noteworthy resistance area, because this used to be a strong selling pressure area.
If gold prices adjust, the 4,515 USD/ounce zone is considered an important support threshold, close to the 200-day moving average. Further, the 4,400 USD/ounce zone is the next major support level.
On the precious metals market, spot silver price increased sharply by 1.68%, to 70.42 USD/ounce. Platinum prices increased 1.81%, to 1,883.65 USD/ounce, while palladium increased by 2.39%, to 1,391 USD/ounce.
The diễn biến of US bond yields, the USD and the message from the Fed will continue to be important factors dominating gold prices in the coming sessions. After a strong increase in August, the market may continue to witness major fluctuations as investors balance between expectations of interest rate reductions and the risk of the Fed maintaining a cautious stance in the face of inflationary pressure.
