World gold prices maintained their upward momentum in the morning session of September 4th after increasing by more than 2% in the previous session. The precious metal is supported by the weakening USD and expectations that the US Federal Reserve (Fed) will not rush to raise interest rates.
As of 9:27 am Vietnam time, spot gold prices increased to 4,477.78 USD/ounce. Meanwhile, December gold futures fell 0.46%, to 4,519.04 USD/ounce.
After a sharp decrease in the first session of the week, gold prices quickly recovered and increased by more than 2% in session 3. 9. The fact that the precious metal has maintained above the 4,400 USD/ounce range shows that buying power is still maintained, although the upward momentum is showing signs of slowing down.
One of the factors supporting gold prices is the weakening USD. The greenback has fallen to its lowest level since May, making gold more attractive to investors holding other currencies.
The Fed's interest rate outlook is also becoming less disadvantageous for gold. Fed Governor Christopher Waller said he is ready to support keeping interest rates unchanged if price pressure continues to cool down. He said recent data has begun to show signs of deflation.
These statements significantly reduced expectations of the Fed raising interest rates in September. The market currently only values the possibility of raising interest rates at about 50%, significantly lower than about 70% at the beginning of the week.
Lower interest rates often support gold prices because precious metals do not generate profits. When yields and interest rates decrease, the opportunity cost of holding gold also decreases, thereby creating more momentum for the demand for precious metals.
In addition, the Japanese Yen increased by nearly 2% in the previous session, in the context of the market increasing expectations that Japan may intervene to support the domestic currency. This development puts more pressure on the USD and indirectly supports gold prices.
Technically, gold prices are holding above the 4,470 USD/ounce zone after a strong increase in the previous session. The 4,400 USD/ounce mark continues to be an important support zone. If maintained above this zone, gold prices may head towards 4,500 USD/ounce. Conversely, if losing 4,400 USD/ounce, selling pressure may increase.
On the precious metals market, spot silver prices fell 0.34%, to 66.74 USD/ounce. Platinum prices fell 0.73%, to 1,809.78 USD/ounce. December palladium futures fell 0.52%, to 1,428.50 USD/ounce.
In the coming sessions, the USD, Fed interest rate expectations and the US jobs report will continue to be important factors determining the direction of gold prices.
