Waiting for news from the Fed, world gold price jumps to new record high

World gold prices soared to a record high on the afternoon of September 16 due to the weak USD and expectations that the US Federal Reserve (Fed) will cut interest rates sharply this week.

Gold bars are displayed at a gold exchange in Seoul, South Korea. Photo: Yonhap/VNA

Spot gold rose 0.5% to $2,588.29 an ounce at 1 p.m. (Vietnam time) after hitting a record high of $2,589.23 an ounce earlier in the session. US gold futures also rose 0.2% to $2,615.80 an ounce.

Traders said trading volumes were low as markets in China, Japan, Indonesia, Malaysia and South Korea were closed for the Mid-Autumn Festival.

The US dollar fell 0.2%, making gold cheaper for holders of other currencies.

The prospect of a 50 basis point rate cut by the Fed this week has caused gold and the dollar to move in opposite directions, said Tim Waterer, senior market analyst at KCM Trade. Given the current situation, gold prices could continue to rise. If the dollar continues to decline, gold could reach $2,700 an ounce by the end of the year.

According to the CME FedWatch tool, the market is now pricing in a 59% chance that the Fed will cut rates by 50 basis points on Wednesday (September 18). This would be the Fed's first rate cut since 2020.

In Vietnam, at 4:42 p.m. on September 16, Saigon Jewelry Company listed the price of SJC gold in the Hanoi market at 78.50 - 80.50 million VND/tael (buy - sell).

Oil prices rise on Fed rate cut prospects

An oil well in Liaoning province, China. Photo: THX/TTXVN

Oil prices rose in Asian trade on Tuesday afternoon on expectations that the Federal Reserve will cut interest rates this week, but gains were capped by persistent concerns about demand and weak Chinese economic data.

Brent crude for November 2024 delivery rose 38 cents, or 0.5 percent, to $71.99 a barrel at 2 p.m. Vietnam time. U.S. West Texas Intermediate (WTI) for October 2024 delivery also rose 49 cents, or 0.7 percent, to $69.14 a barrel.

Markets are focused on the upcoming Federal Open Market Committee (FOMC) policy decision and traders are likely to remain cautious, said Priyanka Sachdeva, senior market analyst at Phillip Nova. Oil prices are likely to remain supported by supply concerns as production in the US Gulf of Mexico remains disrupted.

A key factor that will dominate markets this week is how aggressively the FOMC cuts interest rates after its September 17-18 meeting.

Investors are increasingly betting that the Fed will cut rates by 50 basis points instead of 25 basis points at its next meeting, according to the CME FedWatch tool. Low interest rates typically reduce borrowing costs, which can boost economic activity and boost oil demand.

Kelvin Wong, senior market analyst at OANDA, said the Fed’s 50 basis point cut could signal weak US economic growth, raising concerns about oil demand. Meanwhile, Yeap Jun Rong, market strategist at IG, said market optimism was dampened by weak Chinese economic data released over the weekend. The growth outlook for the world’s second-largest economy has been low for a long time.

Industrial output in China, the world's top oil importer, slowed to a five-month low in August, while retail sales and new home prices continued to decline.

Asian stock investors cautious

Stock index board in Tokyo, Japan. Photo: Kyodo/ VNA

Stock investors were cautious in the afternoon session of September 16 as they waited for the Fed to announce an interest rate cut this week. Concerns about China's weak economic growth also dominated the market.

At the close, Hong Kong's Hang Seng Index (China) rose 0.3% to 17,422.12 points. Tokyo (Japan) and Shanghai (China) markets were closed for a holiday. Sydney, Mumbai, Bangkok and Manila markets also rose slightly, but Singapore and Wellington fell.

Data showing U.S. inflation slowed more than expected in August 2024 to its lowest level since February 2021, fueling speculation that the Fed will cut interest rates by 50 basis points and further ease monetary policy next year. Traders are also watching developments in China after a series of weak economic data on credit, retail sales, industrial production and home prices raised concerns about growth in the world's second-largest economy.

In Vietnam, at the close of the session on September 16, VN-Index decreased by 12.45 points (0.99%) to 1,239.26 points, while HNX-Index decreased by 1.58 points (0.68%) to 230.84 points.

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