World gold prices continued to rise sharply in the first session of the week, reaching a high of more than 3 months as the USD weakened. The market is waiting for US inflation data and the statement of US Federal Reserve (Fed) Chairman Kevin Warsh at Jackson Hole.
As of 2:31 PM Vietnam time, spot gold prices increased by 0.56%, to 4,641.76 USD/ounce. Meanwhile, December gold futures contracts increased by 0.41%, to 4,699.80 USD/ounce.
The upward momentum brought spot gold prices to the highest level in more than 3 months, continuing the increase of more than 5% in the previous week. The precious metal is continuing to be supported by the weakening USD and instability surrounding US fiscal policy.
The greenback is fluctuating near its lowest level in months, as the market assesses the impact of the US Treasury Department's long-term government bond repurchase plan. Weakening the USD often creates momentum for gold because the precious metal is valued in the greenback, thereby becoming more attractive to investors holding other currencies.
According to expert Tim Waterer, chief market analyst at KCM Trade, gold is entering the new week with a positive upward trend and continues to react mainly to the diễn biến of the USD, while the market is also interested in signals from US bond yields.
The focus of the market this week will be the US Personal Consumption Expenditure (PCE) price index data for July and Fed Chairman Kevin Warsh's speech at the Jackson Hole conference. This information may provide more clues about the direction of US interest rate policy.
Investors are specifically monitoring whether Mr. Warsh will change his tone about monetary policy prospects. If the Fed maintains a cautious stance and leaves open the possibility of interest rate adjustments, this could continue to support gold prices.
Besides the monetary factor, the gold market is still affected by geopolitical developments. The US is threatening to impose new economic sanctions against Iran and its trading partners. Geopolitical instability may continue to boost demand for safe-haven assets such as gold.
However, oil prices are falling as investors take profits in anticipation of new developments related to Iran. Energy developments will be a noteworthy factor because a sharp increase in oil prices could increase inflationary pressure, thereby affecting interest rate expectations and exerting reverse pressure on gold.
On the precious metals market, spot silver price is currently at 69.08 USD/ounce, up 0.13%. Platinum price increased by 0.67%, to 1,893.76 USD/ounce. Meanwhile, palladium decreased slightly by 0.02%, to 1,353 USD/ounce.
