Gold recovers after currency policy fluctuations
World gold and silver prices are extending their recovery momentum in the last trading session of the week as factors that once put pressure on the precious metal temporarily reversed. The USD stagnated, US government bond yields fell and oil prices fell, supporting investor sentiment.
The precious metals market is in the process of re-evaluating the impact of the US Federal Reserve (Fed)'s interest rate hike decision. The agency has raised interest rates by another 0.25 percentage points, bringing the operating interest rate band to 3.75-4%.
Although policy signals still show the possibility of further interest rate hikes in the near future, the immediate impact of this decision has decreased as US bond yields and the USD no longer maintain strong growth momentum.
The yield on 10-year US government bonds is currently fluctuating around 4.93-4.94%, significantly lower than the peak of over 5% set in the week. Meanwhile, the USD index shows signs of slowing down after an increase related to monetary policy messages.
This development creates conditions for gold to recover because the precious metal is often under pressure as the USD strengthens and the cost of holding non-performing assets increases.
However, the current upward momentum still depends on the developments of the interest rate market. If bond yields return to an upward trend, selling pressure may reappear.
At the time of writing the article (4:45 AM on September 19 - Vietnam time), spot gold prices on the international market were listed around 4,377 USD/ounce, up 0.85% in the session. Spot silver prices increased sharply by 1.6%, to the threshold of 66.13 USD/ounce.
Falling oil prices have supported precious metals
One of the important factors affecting the market today is oil price developments. Crude oil prices fell for the third consecutive session as investors assessed signals of the ability to maintain alternative supply amid tensions in the Middle East region.
Brent oil prices are currently around 104 USD/barrel, while WTI oil is trading near 101 USD/barrel. The cooling of oil prices helps reduce concerns about inflationary pressure, thereby easing pressure on monetary policy.
However, geopolitical risks are still a factor closely monitored by the market. Developments related to oil transportation through the Strait of Hormuz could quickly affect inflation expectations and safe-haven demand for gold.
In this context, gold is both benefiting from the decrease in yields and continuing to receive support from the need to defend against instability in the energy market.
Silver outperforms gold in recovery
Compared to gold, silver is recording a stronger increase in the latest trading session. After testing the support zone around 62.98 USD/ounce, silver prices have recovered to above 66 USD/ounce and are heading towards higher resistance zones.
According to technical developments, gold prices are testing the resistance zone of 4,381 USD/ounce. If this threshold is surpassed, the market may head towards the 4,396 USD/ounce zone. In the opposite direction, the 4,281 USD/ounce zone is considered an important support area.
For silver, the 66.97 USD/ounce zone is the level to be surpassed to expand the increase to the 68.33 USD/ounce zone and further to 71.18 USD/ounce. Meanwhile, the 65.32 USD/ounce zone is a near support level.
The market is currently continuing to monitor the combination of three main factors including US monetary policy, the diễn biến of the USD and energy prices. In the short term, the decline in bond yields and the weakening of the USD are creating momentum for the precious metal to recover, but the risk of reversal is still present if inflationary pressure or interest rate hike expectations return.
The article only updates the developments of the gold market and factors affecting the price of precious metals, not investment recommendations.
