Gold prices fall sharply as Fed may not cut interest rates as soon as expected

ANTD.VN - Domestic gold prices fell this morning along with the decline in world gold prices as statements by Fed officials increasingly overshadowed expectations of an early interest rate cut.

Specifically, at 9:00 a.m., Saigon Jewelry Company (SJC) listed the buying and selling prices of gold bars at 73.50 - 76.02 million VND/tael, down 500,000 VND/tael in both buying and selling directions.

DOJI Group also reduced the price of SJC gold by a similar amount, listed at 73.45 - 75.95 million VND/tael.

Other businesses also adjusted with a decrease of 200 - 600 thousand VND per tael. Accordingly, PNJ listed the price at 74.00 - 76.50 million VND/tael; Phu Quy SJC 73.50 - 75.90 million VND/tael; Bao Tin Minh Chau 73.55 - 75.85 million VND/tael...

Gold prices fell across the board

Non-SJC gold also turned down today, with a decrease of about 250-350 thousand VND per tael.

Specifically, SJC 99.99 rings are listed at 62.70 - 63.85 million VND/tael; PNJ Gold is listed this morning at 62.70 - 63.80 million VND/tael; Bao Tin Minh Chau's Thang Long Dragon Gold is 63.68 - 64.78 million VND/tael...

In the world, the gold price in the trading session on January 16 in the US market (last night, early this morning Vietnam time) witnessed a decrease of nearly 26 USD/ounce, equivalent to a decrease of 1.26% in the session, closing at 2,028.44 USD/ounce for spot gold.

Gold has been negatively affected by recent comments from several US Federal Reserve (Fed) officials, which have forced previously overly optimistic analysts and market participants to take a more realistic view on the timing and extent of interest rate cuts this year.

In a speech today at the Brookings Institution, one of the Fed's 12 voting members, Governor Christopher Waller, reinforced what Chairman Powell said at a press conference in December. He said that while a rate cut is likely this year, the central bank is in no rush.

“As long as inflation does not rebound and remains elevated, I believe the Federal Open Market Committee (FOMC) will be able to lower the target range for the federal funds rate this year,” he said. In previous cycles, the FOMC has cut rates quickly and often by large amounts, but he sees “no reason to act as quickly as in the past.”

“When the time comes to start lowering interest rates, I believe that it can and should be done methodically and carefully,” he stressed.

Waller's remarks come after several Fed officials have raised the timing and number of rate cuts the Fed will make this year. New York Fed President John Williams said last Wednesday that he sees rate cuts only happening when the Fed believes inflation is essentially back to its 2% target.

Cleveland Fed President Loretta Mester also told Bloomberg TV that the idea of a rate cut in March is probably premature…

Overall, these statements, along with equally cautious comments from ECB officials, reinforce the view that a rate cut in March is unlikely. Expectations for a Fed rate cut this year remain consistent with Chairman Powell’s comments that the Fed will cut rates by 75 basis points and could begin cutting by the end of the second quarter.

However, market participants were too optimistic that the Fed's rate cuts could start sooner and deeper than the Chairman's comments suggested, which is why gold rallied quite strongly late last year.

However, after Mr. Waller's remarks yesterday, the US dollar jumped to a one-month high and gold fell more than 1%.

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