World gold prices fell in the afternoon trading session of August 13 after reaching a 2-month high. Investors temporarily took profits after a sharp increase, while waiting for US producer price data to assess the monetary policy outlook of the Fed.
As of about 2:25 PM Vietnam time, spot gold prices fell 0.68% to 4,376.55 USD/ounce. December gold futures fell 0.77% to 4,433.12 USD/ounce.
Previously in the session, gold prices had increased by about 1% and reached the highest level since June 5. However, the precious metal then turned down when the market entered a correction phase after a strong increase in recent days.
The market has lowered expectations about the possibility of the Fed continuing to raise interest rates in the near future, but investors are still cautious and waiting for US producer price index PPI data to find more signals before deciding the next trend of gold prices.
Gold prices have increased by more than 8% since the beginning of August, as recent US economic data shows that the economy is showing signs of cooling down.
Data released on August 12 showed that the US consumer price index (CPI) increased by 3.4% in the 12 months up to July, lower than the 3.5% of June and in line with economists' forecasts. This is the second consecutive month inflation has cooled down on a basis compared to the same period last year.
After this data, the market reduced expectations for the Fed to raise interest rates in the September meeting. According to CME FedWatch, the probability of the Fed raising interest rates in September is currently around 40%, down from about 54% a week earlier.
Less tightened interest rate prospects are supporting gold because precious metals do not yield yields. When interest rates fall or interest rate hike expectations weaken, the opportunity cost of holding gold also decreases.
On the precious metals market, spot silver prices also faced adjustment pressure. Spot silver prices fell 1% to 64.68 USD/ounce. Spot platinum prices fell 1.54% to 1,729.68 USD/ounce, while palladium prices fell 1.66% to 1,348.50 USD/ounce.
The energy market also recorded a downward trend. Brent oil price was at 88.49 USD/barrel, down 0.55%, while WTI oil decreased by 0.59% to 82.78 USD/barrel.
Besides economic factors, the market continues to monitor geopolitical tensions in the Middle East. Iran and the US have not yet made progress in negotiations aimed at a long-term agreement to end the conflict in the Gulf region. New developments may continue to strongly impact energy prices, inflation and the monetary policy outlook of the Fed.
