World gold prices continued to maintain above the threshold of 4,100 USD/ounce in the trading session on July 23 after a strong recovery in the previous two sessions. The market is still simultaneously affected by geopolitical tensions in the Middle East and expectations that the US Federal Reserve (Fed) will maintain a high interest rate level for a long time.
As of 9:57 am Vietnam time, spot gold prices increased by 1.35% to 4,127.03 USD/ounce after increasing by about 3% in the last two sessions. Meanwhile, gold futures for August delivery fell 0.54% to 4,130.80 USD/ounce.
Bottom-fishing buying power after a period of deep correction continues to support the market, helping gold prices maintain the 4,000 USD/ounce zone - an important support level that investors have been monitoring in recent sessions.
However, the recovery momentum of the precious metal is still under pressure from developments in the energy market. Tensions between the US and Iran have not shown signs of cooling down as the two sides have not signaled a resumption of negotiations. Meanwhile, attacks targeting oil tankers on the Red Sea transport route have increased concerns about the risk of disruption to global energy supplies.
These developments pushed oil prices to continue to rise. Brent oil at times rose to about 94 USD/barrel, while WTI oil traded around 86.8 USD/barrel - both at the highest level in many weeks.
Rising energy prices make the market continue to assess the possibility of inflation remaining at a higher than expected level. This increases the forecast that the Fed will maintain a cautious monetary policy for a longer time, thereby putting pressure on non-profit assets such as gold.
Along with that, the yield on 10-year US government bonds increased to about 4.66%, while the USD Index remained around the 101 point mark. These two factors continue to increase the opportunity cost of holding gold.
However, recent developments show that gold has somewhat separated from the traditional reverse relationship with bond yields. Although yields are still anchored at a high level, gold prices still maintain above the 4,100 USD/ounce range thanks to bottom-fishing buying and risk hedging needs in the face of geopolitical instability.
In the precious metal group, spot silver price increased by 0.07% to 59.76 USD/ounce, approaching the 61 USD/ounce resistance zone. Platinum price increased by 0.66% to 1,655.56 USD/ounce, while palladium increased by 0.67% to 1,304.75 USD/ounce.
The market is currently focusing on monitoring the upcoming Fed policy meeting, along with developments in the Middle East and fluctuations in oil prices - factors that are assessed to continue to dominate the trend of the precious metals market in the short term.
