World gold prices recovered in the last session of the week, as cooling oil prices helped reduce pressure on the precious metal. However, gold still recorded a week of price decline due to increased market expectations that the Fed would raise interest rates.
The world market closed at 4 am Vietnam time, when spot gold price was at 4,348.93 USD/ounce, up 0.75%. December gold futures fell 0.39% to 4,390 USD/ounce.
On the precious metals market, spot silver price was at 64.50 USD/ounce, up 1.43%. Platinum price increased by 0.96%, to 1,798.61 USD/ounce. Meanwhile, palladium price increased sharply by 1.57%, to 1,315 USD/ounce.
Gold prices are under pressure next week as US producer price index (PPI) data shows producer prices rose in August. After that, the consumer price index (CPI) report continued to reinforce expectations that the Fed will raise interest rates next week.
According to the CME FedWatch tool, the market currently values the probability of the Fed raising interest rates at 87%, a sharp increase compared to 67% before CPI data was released.
However, gold prices are showing the possibility of forming a support zone around 4,300 USD/ounce. The resurgence of buying pressure as prices approach this zone helps the precious metal quickly recover after a deep decline.
The decrease in oil prices in the last session of the week also created more support for gold. High oil prices often increase inflationary pressure and expectations of rising interest rates, thereby putting pressure on precious metals.
In addition, gold demand in India is still quite sluggish due to strong price fluctuations, making buyers cautious. Meanwhile, gold investment demand in China remains positive.
Despite recovering in the last session of the week, gold prices are still heading towards their third consecutive week of decline. Price movements show that the 4,300 USD/ounce range is becoming an important threshold for the market in the short term.
