World gold prices on August 19 rebounded after a sharp decline in the previous session, as the USD weakened and global bond yields cooled down, supporting the attractiveness of the precious metal.
As of 3:13 PM Vietnam time, spot gold prices increased by 0.61%, to 4,361.22 USD/ounce. December gold futures fell 0.27%, to 4,408.72 USD/ounce.
Gold recovered after falling about 2% in the previous session, amid bond market pressure from the US, Germany to Japan, pushing long-term borrowing costs to their highest level in decades due to concerns about inflation.
In the session on August 19, the sell-off in the bond market slowed down, causing the USD to weaken and yields to cool down. This contributed to improving the attractiveness of gold – an asset that does not yield yields.
In the short term, the gold market is still affected by many opposing factors, from geopolitical tensions to the Fed's monetary policy outlook. However, as price pressure gradually cools down and the Fed's ability to maintain current interest rates is strengthened, gold's recovery outlook continues to be supported.
The market is currently awaiting the minutes of the Fed's July monetary policy meeting to find more signals about interest rate orientation. According to market expectations, the probability of the Fed keeping interest rates unchanged is at 67%, while the possibility of raising interest rates has decreased after a series of negative US economic data.
Lower interest rates often support gold prices because they reduce the opportunity cost of holding this non-profit asset. UBS experts also said that gold has increased by nearly 10% in the month and still has an upward outlook in the medium term as real interest rates in the US decrease and investment demand remains high.
On other precious metals markets, spot silver prices decreased 0.17%, to 63.23 USD/ounce. Platinum prices increased 0.52%, to 1,725.64 USD/ounce, while palladium prices decreased 0.12%, to 1,292 USD/ounce.
In the energy market, oil prices continued to rise amid instability related to transportation through the Strait of Hormuz. Brent oil increased by 0.56%, to 91.53 USD/barrel, while WTI oil increased by 0.59%, reaching 84.56 USD/barrel.
