Gold price caught in a downward spiral, down to a 3-month low, an EU country bought 19 tons to increase reserves to a record level

Gold prices today, June 23, 2023, are caught in a downward spiral in the market, both from a demand perspective and because it makes competing assets, government bonds, more attractive as bond yields rise. Why do analysts think the market is witnessing a healthy correction in a solid long-term uptrend?

LIVE UPDATE TABLE OF GOLD PRICE TODAY 6/23 AND EXCHANGE RATE TODAY 6/23

1. SJC - Updated: 06/22/2023 09:34 - Website time of supply - ▼ / ▲ Compared to yesterday.
Type	Buy	Sell
SJC 1L, 10L	66,450	67,050
SJC 5c	66,450	67,070
SJC 2c, 1c, 5 phan	66,450	67,080
SJC 99.99 gold ring 1 chi, 2 chi, 5 chi	55,500	56,450
SJC 99.99 gold ring 0.5 chi	55,500	56,550
Jewelry 99.99%	55,350	56,050
Jewelry 99%	54,295	55,495
Jewelry 68%	36,268	38,268
Jewelry 41.7%	21,525	23,525

World gold prices fell and approached the lowest level in three months recorded in the previous session, due to the increase in the US dollar and cautious investors, following comments from the head of the US Federal Reserve (Fed). The gold market has been under pressure to decrease for two consecutive days with a total decrease of 30 USD/ounce, equivalent to 856,000 VND/tael.

According to TG&VN at 9:30 p.m. on June 22 (Vietnam time) on Kitco, the gold price was trading at 1,918.4 USD/ounce, down 14.2 USD compared to the previous session . Last time, August gold fell 8.80 USD to 1,936.30 USD.

Other major markets have just seen the dollar index edge higher. Nymex crude oil prices are lower, trading around $71.15 a barrel. Meanwhile, the benchmark 10-year US Treasury yield is currently at 3.758%.

Gold price today June 23, 2023: Gold price falls to 3-month low, an EU country buys 19 tons of gold, increasing reserves to a record level. (Source: Kitco)

"The fight against inflation in the United States has a long way to go to reach the 2% target," Fed Chairman Jerome Powell said on June 21, before the US House Financial Services Committee. Mr. Powell stated that inflationary pressures continue to rise, although the Fed postponed raising interest rates at the recent meeting, most of the agency's policymakers expect higher interest rates to be appropriate by the end of 2023.

Mr. Powell also said that the possibility of further interest rate increases is a fairly accurate prediction of the Fed's direction if the economy continues on its current path.

Domestic gold prices recorded an upward trend of around VND40,000 - 100,000/tael at stores at the end of the session on June 22 after slowing down at the beginning of the session. In the market, purchasing power is currently quite weak, and many gold holders are even waiting for high prices to sell.

Converted according to the exchange rate listed at the bank, the world gold price is only equivalent to 55 million VND/tael. However, the selling price of SJC gold bars remains at 67 million VND/tael, leading to the difference between domestic and world gold prices increasing to 12 million VND/tael.

Summary of SJC gold prices at major domestic trading brands at the closing time of last weekend's trading session (June 22):

Saigon Jewelry Company listed the price of SJC gold at 66.45 - 67.07 million VND/tael.

Doji Group currently lists SJC gold price at: 66.40 - 67.00 million VND/tael.

Phu Quy Group listed at: 66.45 - 67.05 million VND/tael.

PNJ system listed at: 66.45 - 67.00 million VND/tael.

SJC gold price at Bao Tin Minh Chau is listed at: 66.46 - 67.03 million VND/tael; Rong Thang Long gold brand is traded at 55.81 - 56.66 million VND/tael; jewelry gold price is traded at 55.30 - 56.40 million VND/tael.

Gold price forecast?

Despite the Fed chief's comments, the market still believes the Fed is about to end its rate hikes, which is why gold hasn't really moved much, said Edward Meir, a metals analyst at Marex . Meir said gold is falling slightly, but not collapsing, and could trade in the $1,900-$1,980/ounce range until the Fed makes its next decision.

Powell’s comments did little to dampen investor sentiment in futures markets tied to the Fed’s interest rate policy, observers said, as investors still expect the Fed to raise rates once this year, followed by cuts in January. A high-interest-rate environment typically reduces the appeal of non-yielding gold, which has fallen since the start of the week.

In the international market, some organizations have lowered their forecast for world gold prices in the last 6 months of this year to 2,000 USD/ounce, 50 USD/ounce lower than the previous forecast. There are still many different forecasts about when the Fed will lower interest rates. However, according to analysts, interest rates are starting to stabilize, the stock market is increasing, so in the near future, gold will no longer be the preferred channel of choice for investors. Therefore, gold will find it difficult to increase in price quickly for a while.

Meanwhile, on the demand side, in a recent report, ANZ Bank said that China - the world's leading gold consumer, saw its retail sales growth rate of gold and silver jewelry in May decrease by 24% compared to the same period last year, compared to decreases of 44% and 37% in March and April.

But the Polish Central Bank bought another 19 tonnes of gold, pushing its reserves to a record high in May. Central bank demand for gold continues to dominate the market, with the Polish National Bank seeing its gold reserves hit a record high in May.

The Polish central bank bought 19 tonnes of gold last month, Krishan Gopaul, senior analyst for Europe, the Middle East and Asia at the World Gold Council , wrote on Twitter on June 21. “This follows the addition of 15 tonnes in April, bringing the gold reserves to a new record high of 263 tonnes,” he said.

Poland's latest announcement comes shortly after the Reserve Bank of India added 2 tons of gold to its reserves last month. The Czech National Bank bought 1.8 tons of gold. Russia added 3.1 tons to its reserves and the Central Bank of the Kyrgyz Republic bought 1.5 tons, according to IMF data.

The latest figures reported by the World Gold Council continue to demonstrate that central bank demand for gold is almost unsatisfactory, according to some analysts. Central bank demand is providing important support for gold in a challenging environment as interest rates continue to rise around the world due to rising inflation, some analysts note.

Gold prices recently tested support at a two-month low below $1,950 an ounce, but analysts have noted that the price action suggests the market is witnessing a healthy correction in a solid long-term uptrend. In contrast, emerging market central banks have been behind the bulk of the buying over the past 13 years.

In a recent interview with Kitco News, gold expert George Milling-Stanley at State Street Global Advisors said that he expects central banks to continue buying gold as they diversify their portfolios away from the US dollar.

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