Gold market “submerged” as USD strengthens

Gold is "submerged"

In the past two sessions, the domestic gold market attracted attention when the price of SJC gold "cooled down" but the price of gold rings suddenly increased sharply and at one point successfully conquered the record high of 65 million VND/tael.

Right at the time when non-SJC gold was excited, last night, in the US market, world gold was suddenly "submerged" by the USD.

Gold prices fell more than 1% on Tuesday, pressured by a firmer dollar and higher U.S. Treasury yields after Federal Reserve Governor Christopher Waller made hawkish comments about cutting interest rates this year, but safe-haven buying limited the downside for bullion.

Spot gold fell 1.3% to $2,027.26 an ounce after rising in the previous three sessions. U.S. gold futures fell more than 1% to $2,030.2.

Gold market gets hammered as USD strengthens picture 1 — The gold market is being “submerged” as the USD strengthens. Although it lost 1.3% overnight, this decline is still “modest” compared to reality. Photo: Hoang Tu

“A strong U.S. dollar index is weighing on the gold market as well as rising U.S. Treasury yields on the first day back from the three-day holiday weekend,” said Jim Wyckoff, senior analyst at Kitco Metals.

“However, one could argue that the drop in gold prices is not that bad given the strength of the dollar as tensions in the Middle East keep prices at a floor,” the expert analyzed.

The dollar index rose nearly 1% to its highest in more than a month, making bullion less attractive to holders of other currencies, while yields on 10-year U.S. Treasury notes also rose.

Waller said the US is “a long way from” the Fed’s 2% inflation target, but the central bank should not rush to cut its benchmark interest rate until it is clear lower inflation will be sustained.

The Fed is widely expected to keep its policy rate steady at the end of its meeting on January 30-31. Traders see a 67% chance of a rate cut in March, according to the CME Fedwatch tool.

Elsewhere, European Central Bank officials also pushed back against market expectations for a quick rate cut this year.

Spot silver fell 1.2% to $22.93 an ounce. Platinum fell 2.1% to $895.56 and palladium fell 3.8% to $934.32, marking their lowest in more than a month.

The CFTC's Disaggregated Commitments of Traders report for the week ending January 6 showed that money managers reduced their speculative net long positions in Comex gold futures by 20,051 contracts to 134,333. Meanwhile, short positions increased by just 639 contracts to 45,874.

Gold rings face difficulties before the "peak"

As mentioned above, in the last 2 sessions, the price of gold rings increased sharply and at one point successfully conquered the 65 million VND/tael mark. After that, this precious metal cooled down but was still expected to quickly regain this record. However, after the decline of world gold in the US market last night, gold rings or SJC gold are predicted to have a session of ups and downs on January 17.

Phu Nhuan Jewelry Company was the earliest to open. PNJ gold price was traded at: 62.70 million VND/tael – 63.80 million VND/tael, down 350,000 VND/tael, equivalent to 0.56%. Thus, PNJ gold price “fell” at only half the rate of world gold.

Closing yesterday, the price of Thang Long Dragon gold at Bao Tin Minh Chau Jewelry Company stopped at: 63.83 million VND/tael - 64.93 million VND/tael, slightly down from the "peak" but still up 410,000 VND/tael, equivalent to 0.65% compared to the end of last week.

Meanwhile, the price of SJC gold also promises a day full of "ups and downs". Opening the trading session on January 17, PNJ Company adjusted the price of SJC gold down by 500,000 VND/tael for buying and 200,000 VND/tael for selling to 74 million VND/tael - 76.50 million VND/tael.

At Saigon Jewelry Company – SJC, SJC gold price is traded at: 73.50 million VND/tael – 76 million VND/tael, down 500,000 VND/tael in both buying and selling directions, equivalent to 0.07%.

At Bao Tin Minh Chau, the closing price of SJC gold on January 16 was: 73.90 million VND/tael - 76.15 million VND/tael, down 100,000 VND/tael for buying but down 750,000 VND/tael for selling compared to the end of last week.

Doji Group has not adjusted the listed price. Currently, the SJC gold price at this group is trading at: 73.95 million VND/tael - 76.45 million VND/tael.

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