World gold price reverses, suddenly plummets

At 6:34 GMT (13.34 Vietnam time), spot gold prices still increased by 1% to 3,870.1 USD/ounce. If it maintains this threshold, gold will record its strongest month of price increase in 16 years.

However, in just two hours, world gold recorded a sharp decline. At 3:46 p.m., the precious metal was listed at $3,819.70 an ounce, down $20.4.

This move is considered sudden as there is no economic or geopolitical factor large enough to lead to such a strong price decrease. In the US, President Donald Trump and Democratic leaders did not seem to have made much progress in the meeting at the White House to prevent the risk of the government having to close, which could disrupt a series of services as early as Wednesday.

Both sides after the meeting said that the rest would be held accountable if the National Assembly did not extend the government budget after the deadline for midnight on Tuesday (ie 4:00 GMT on Wednesday morning).

The risk of the US government's shutdown is creating an uncertain fog for the market, thereby accelerating the increase of gold. The $4,000/ounce mark is now a feasible target by the end of the year, in the context of falling interest rates and geopolitical hotspots continuing to support gold, said Mr. Tim Waterer, chief analyst at KCM Trade.

Notably, recent US economic data has reinforced expectations that the Fed will cut interest rates further this year. According to CME Group's FedWatch tool, investors are placing about 89% of the possibility of the Fed cutting 25 basis points at the October meeting. FED President of St. Petersburg Branch Louis - Alberto Musalem - also said that he is ready to consider lowering interest rates, but emphasized the need to be cautious to maintain pressure on inflation.

In a low interest rate environment, gold is further promoting its role as a safe-haven asset. The world's largest gold ETF SPDR Gold Trust said its holdings increased by 0.6% to 1,011.73 tonnes on September 29, the highest level since July 2022.

Investors are now waiting for a series of upcoming US economic data, including the non-farm payrolls report on October 4. The US Department of Labor confirmed that if the government is shut down, important reports such as the September employment data will be postponed.