World gold prices rose in the first trading session of the week, supported by the weakening of the USD and the temporary cooling of tensions in the Middle East.
As of 12:20 PM on July 27 (Vietnam time), spot world gold prices increased by 0.93%, to 4,090 USD/ounce.
The upward momentum of the precious metal appeared in the context of the USD index falling by about 0.3%. Weaker greenbacks make gold cheaper for investors holding other currencies, thereby improving demand in the international market.
In addition, some issues related to the information that the US and Iran have temporarily suspended attack operations have partly reduced concerns about the risk of conflict continuing to spread.
New developments caused oil prices to fall more than 4% during the day. The decline in oil contributed to easing inflationary pressure, while limiting expectations that central banks would continue to raise interest rates.
Previously, oil prices had increased sharply since the conflict broke out, raising concerns that commodity and energy costs would push inflation higher. The increasing interest rate environment is often detrimental to gold because precious metals do not yield yields, making the opportunity cost to hold gold larger.
In the long term, gold's prospects are still positively assessed. However, price movements in the coming time may continue to fluctuate strongly, depending on the direction of oil prices and geopolitical information. A more sustainable peace agreement is considered a necessary factor for market stability.
Investor attention is now shifting to a series of important monetary policy decisions this week. After a rather quiet week of economic data, the market will receive July interest rate decisions from the US Federal Reserve, the Bank of England and the Bank of Japan, along with reports on consumer confidence and US Q2 GDP growth.
The first notable data is the July consumer confidence report, released on Tuesday. After that, the focus will be on the interest rate decision and the press conference of the US Federal Open Market Committee on Wednesday afternoon. Most markets predict the Fed will keep interest rates unchanged at this meeting, while traders are assessing about 76% of the possibility of interest rates being adjusted up in September.
On Thursday, the market continued to monitor the policy decisions of the Bank of England, preliminary Q2 GDP data, the US Personal Consumption Price Index and weekly jobless claims. The policy decisions of the Bank of Japan will also be announced overnight. The trading week closed with adjusted data on US consumer sentiment in July.
On the other precious metal market, silver prices increased sharply by 2.12% to the threshold of 59.25 USD/ounce. Platinum prices increased by 2.15%, reaching 1,619 USD/ounce, while palladium increased by 2.04%, to 1,252 USD/ounce.
The article only provides updated information on gold market developments and related economic factors, not investment recommendations. Readers need to carefully consider risks and refer to more sources before making financial decisions.
