World gold prices continued to fall in the trading session on September 2nd, as global bond yields rose sharply, weakening the attractiveness of the precious metal. The decline pulled gold prices to their lowest level in nearly two weeks, while investors increased bets on the possibility of the Fed maintaining its high interest rate policy.
As of 8:20 am Vietnam time, spot gold price decreased by 0.19% to 4,320.3 USD/ounce. Meanwhile, December gold futures price decreased by 0.66%, to 4,367.4 USD/ounce.
Current developments extend the strong correction of gold prices in previous sessions. According to market data, spot gold prices once decreased by 2.4% in the previous session, to 4,328.79 USD/ounce. This is also the lowest price range since August 19.
The main pressure on gold comes from the developments of the bond market. Increased bond yields reduce the attractiveness of gold - an asset that does not bring fixed income. The USD also edged up, creating more resistance for the precious metal.
The market is currently paying special attention to the interest rate outlook of the US Federal Reserve (Fed). Recent tough statements from Fed officials have increased expectations about the possibility of interest rate hikes in September. Investors are currently betting nearly 70% on the possibility of the Fed increasing by 0.25 percentage points at this month's meeting.
Previously, Fed Chairman Kevin Warsh emphasized a tough stance on monetary policy, while Fed Governor Michael Barr said that the US central bank needs to be ready to raise interest rates if price pressures do not cool down.
According to Mr. Ryan McKay - senior commodity strategist at TD Securities, the decline in gold prices is a continuation of Mr. Warsh's speech at Jackson Hole and Mr. Barr's recent comments. The global bond market's continued sell-off further increases pressure on the precious metal.
Not only gold, other precious metals also simultaneously decreased in the morning trading session of September 2. Spot silver price was at 63.9595 USD/ounce, down 0.2%. Platinum price decreased by 0.53%, to 1,734.98 USD/ounce, while palladium price decreased by 0.97%, to 1,307.25 USD/ounce.
Technically, the fact that gold prices continuously fluctuate below important levels is increasing the risk of correction. The 4,300 USD/ounce zone is now becoming a monitoring threshold. If the price breaks through this zone, selling pressure may continue to increase.
In the opposite direction, to improve short-term prospects, gold prices need to soon regain the resistance zones above, initially around 4,474 USD/ounce, then 4,530 USD/ounce, corresponding to the 200-day moving average.
In the context that bond yields are still high and expectations for the Fed's interest rate policy are unclear, the diễn biến of yields, the USD and US economic data will continue to be important factors for gold prices in the coming sessions.
