Gold price "headwind" as US inflation persists

ANTD.VN - Gold prices continue to be under pressure as newly released economic data shows that inflation in the US is still persistent and interest rates may remain high for a longer period of time.

This morning, domestic gold prices turned slightly up, recovering some of yesterday's decline. Accordingly, SJC gold was adjusted by Saigon Jewelry Company (SJC) to increase by VND50,000 per tael compared to the previous session's close, to VND67.85 - 68.57 million per tael.

At DOJI, the national gold brand price in the early morning was listed at 67.80 - 68.65 million VND/tael; PNJ 67.90 - 68.60 million VND/tael; SJC Phu Quy gold 67.85 - 68.55 million VND/tael...

In the world market, gold prices in the US market in the trading session on September 14 (last night Vietnam time) fluctuated slightly after the US PPI (producer price index) data was released, showing that consumers should not expect inflationary pressures to ease soon as manufacturers are seeing strong price increases.

Inflationary pressure and high interest rates are weighing on gold prices

Specifically, the gold market has come under further selling pressure after the US Department of Labor said the country's PPI increased 0.7% last month after 0.4% in July. This figure is also higher than economists' previous expectations with a forecast increase of 0.4%.

The PPI increase in August was also the largest since the index rose 0.9% in June 2022. Meanwhile, the core PPI, which strips out volatile food and energy costs, rose 0.2% last month, in line with market expectations.

Meanwhile, U.S. retail sales rose 0.6% in August, compared with market expectations for a 0.1% gain. The figures suggest the Federal Reserve will continue to raise interest rates to curb inflation but also slow economic growth. That could mean less demand for raw commodities, including metals.

After the data was released, spot gold briefly fell to nearly $1,900 an ounce, but quickly recovered. At the close of the session, the precious metal rose slightly by $2.7 an ounce to $1,910.6 an ounce.

Analysts say gold continues to face significant headwinds as the threat of inflation continues to favor tighter monetary policies from the Federal Reserve (Fed).

In other news, China's central bank has eased monetary policy again, this time by cutting the reserve requirement ratio for banks by 0.25%, effective today, in an effort to revive the world's second-largest economy.

Meanwhile, the European Central Bank (ECB) also held its regular monetary policy meeting on Thursday and slightly raised its key interest rate by 0.25% to 4.0%.

The dollar index rose 0.6 percent to its highest in more than six months, denting gold's appeal to foreign investors, and 10-year U.S. bond yields also rose.

However, gold quickly regained balance after a series of negative news, the threshold of 1,900 USD/ounce is considered a good support level and has attracted some investors when the gold price fell to this price range.

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