World gold prices are slightly adjusting after a strong rally, in the context of investors taking profits but still maintaining positive expectations for the precious metal.
As of 2:12 PM Vietnam time, spot gold prices fell 0.22% to 4,641.29 USD/ounce. Meanwhile, December gold futures fell 0.01% to 4,697.51 USD/ounce.
This development took place after gold prices rose sharply in the session of August 24. Spot gold prices at one point jumped to nearly 4,700 USD/ounce, the highest level since mid-May, before narrowing the increase momentum. Last week, the precious metal increased by more than 5%, extending the strong recovery momentum.
Fundamental and technical factors are simultaneously driving the upward trend of gold in the early trading week" - Mr. Jim Wyckoff, a commodity and financial market analyst at Kitco, told Reuters - "Government bond yields have stabilized, even slightly decreased today.
According to the World Gold Council (WGC), gold-backed ETFs recorded capital inflows equivalent to 46.7 tons of gold, worth 6.4 billion USD in the past week. This is the largest weekly net inflow in 10 months, in which funds in North America and Europe led in cash flow.
Precious metals rose more than 5% last week, after the US Treasury Department's government bond market support plan pushed the USD to its lowest level in months. This development makes gold more accessible to investors holding other currencies.
The market is currently awaiting the US Personal Consumption Expenditures (PCE) price index to be released on Wednesday, along with Fed Chairman Kevin Warsh's speech at the Jackson Hole seminar on Friday.
Investors are also continuing to monitor the situation in the Middle East. The administration of US President Donald Trump has announced the expansion of secondary sanctions against countries around the world maintaining business relations with Iran. China is currently the largest customer of Iranian oil.
On the precious metals market, spot silver prices fell 0.78% to 68.41 USD/ounce. Platinum prices fell 0.97% to 1,862.21 USD/ounce. Palladium prices fell 1.12% to 1,344.50 USD/ounce.
