Gold under selling pressure as USD strengthens

01/24/2024 11:44 Nhat Linh Print article

ANTD.VN - Hedge funds have begun to increase their short positions in the first days of the year, as gold prices have been pressured by the strength of the US dollar.

Domestic gold prices continued to increase this morning, although the increase was not too large. At 9:30 a.m., Saigon Jewelry Company (SJC) listed the price of gold bars at 74.20 - 76.70 million VND/tael, an increase of 200,000 VND/tael in both buying and selling prices compared to yesterday's closing price.

The increase of 200,000 VND per tael is also being applied by most domestic gold trading businesses in the early morning.

Accordingly, Phu Nhuan Jewelry Company (PNJ) listed the price of SJC gold bars at 74.20 - 76.70 million VND/tael. DOJI Group listed at 74.15 - 76.65 million VND/tael; Phu Quy SJC 74.20 - 76.60 million VND/tael; Bao Tin Minh Chau 74.20 - 76.85 million VND/tael...

Gold prices are under pressure from the USD

Meanwhile, non-SJC gold tends to remain unchanged compared to the previous session's close.

Specifically, SJC 99.99 rings are listed at 62.85 - 64.05 million VND/tael; PNJ Gold is listed this morning at 62.85 - 64.10 million VND/tael; Bao Tin Minh Chau's Thang Long Dragon Gold is 63.83 - 64.93 million VND/tael...

Globally, gold prices have been in a state of moderation in recent sessions. Currently, spot gold is trading at around 2,025 USD/ounce, about 2 USD higher than the same time yesterday.

Gold is under technical selling pressure amid shifting interest rate expectations ahead of the Federal Reserve’s first rate cut in its upcoming easing cycle, according to the latest data from the U.S. Commodity Futures Trading Commission (CFTC). Hedge funds, in particular, have started to increase their short positions, according to the latest trading data from the U.S. Commodity Futures Trading Commission (CFTC).

It was a disappointing start to the year for precious metals investors, with most predicting a strong industry-wide recovery in 2024. But the dollar’s rally since late December has continued to put downward pressure on gold prices.

The CFTC’s Disaggregated Commitments of Traders report for the week ending January 16 showed that money managers reduced their speculative net long positions in Comex gold futures by 3,402 contracts to 130,931. Meanwhile, short positions increased by 1,828 contracts to 47,702. This left the gold market with a net long position of 83,229 contracts.

Hawkish comments from Fed officials have prompted investors to aggressively cut gold positions, experts say.

Along with that, solid economic data last week pushed market expectations for a March rate cut to 50/50, down significantly from the 80% probability priced in the previous week.

Despite the headwinds, some analysts continue to see upside potential for the precious metal. Geopolitical uncertainties due to ongoing turmoil in the Middle East and fears of an economic slowdown continue to support gold prices in the long term.

In a recent report, JPMorgan also believes that the medium-term outlook for gold through 2024 and into the first half of 2025 remains quite positive.

Experts say any dip in the coming months will be seen as a buying opportunity ahead of a breakout recovery that JPMorgan expects to begin in mid-2024 as US GDP growth slows.

Source link