World Gold Price Drops Sharply After Reaching Historical Peaks

The world gold price today, September 18, 2024, has ​dropped sharply after⁢ consecutively reaching historical peaks, before the US made a turning point decision on monetary policy. SJC gold bars increased by 1.5 million VND/tael, while gold rings remained at a record high.

Domestic Gold Price

At the end of ⁣the ⁢trading session on September 17, the domestic price of SJC 9999 gold bars was listed by SJC ‍and Doji Gold‌ and Gemstone Group in Hanoi and ⁢Ho Chi Minh ‌City at VND80-82 million/tael (buy – sell), an increase of VND1.5 million/tael compared to ​the previous session.

Domestic gold ring prices remain at a record high, around VND77.9 million/tael (buy) and VND79.2 million/tael (sell).

SJC listed⁢ the price of gold rings ⁢of ‍type ⁢1-5 at only 77.9-79.2 million VND/tael (buy – sell). ​Doji listed the price of 9999 smooth ‍round gold rings at 78-79.2 million VND/tael (buy – sell).

World Gold Price

As of 8:00 p.m. on September 17‍ (Vietnam time),‍ the spot gold price today on‌ the ⁢world market was at 2,577 USD/ounce. Gold for December 2024 delivery on the Comex New York floor was at 2,599 USD/ounce.

Thus, ⁣compared to the historical peak of 2,585‍ USD/ounce recorded in the morning, the spot gold price has decreased slightly.

The world gold price on the night of September 17 was about 24.9% higher (514 USD/ounce) than at ⁣the⁢ beginning of 2024. The world gold price converted to the bank USD price was 77.7 million VND/tael, including taxes and fees, about 4.3 million‌ VND/tael lower ⁣than ⁢the domestic gold price as of the⁢ end of the afternoon session on September 17.

Fed’s Decision on⁤ Interest Rates

Gold prices in the international market fell mainly due to​ profit-taking pressure after gold continuously set record highs​ in recent sessions. Investors’ caution at the time when the ‌US Federal Reserve (Fed) entered a very important ‌meeting in recent years.

The Fed begins a⁤ two-day meeting, from September 17⁤ New​ York time (September 17 evening Vietnam time).

According to signals from the Fed and the market, in this meeting, the US Central Bank will cut the operating interest ⁤rate for the first time since March 2020. Previously, the​ Fed had raised interest rates 11 times, from​ March 2022 to September 2023,‍ bringing interest rates from a record low of 0-0.25%/year to the current 5.25-5.5%.

The Fed raised interest rates to curb inflation, which peaked at a historic 9.1% in June 2022. Maintaining very high interest rates over the past two years has caused many difficulties for Americans, and the economy has recently shown many negative signs, ‍affecting ⁣the labor market. Many experts fear that the ​US⁤ economy‌ will fall into recession.

Gold Price Forecast

Before September 13, ​the market reflected⁤ a 60-70% chance that the Fed would ‍cut interest rates by 0.25%, but in recent days, the odds ‌of betting on a 0.5 percentage ‌point cut have ⁢skyrocketed, reaching 67% by late afternoon on September 17, with only 33% betting on a 0.25 percentage point⁤ cut.

Along‍ with the possibility of the Fed cutting interest rates sharply, the USD also fell sharply. The DXY index (measuring the USD’s fluctuations‍ against a basket of 6 major currencies) fell to 100.6 points on the afternoon of September 17, compared to 101.8 points on September 12, 103 points in mid-August and 106.25⁢ points at the end of April. However, the ⁣DXY index is rising again to​ 100.8 points on the evening of September⁤ 17.

Investors seem to be cautious about the Fed’s⁣ decision on how much to cut after the‌ meeting on September 18​ (early morning of September⁢ 19, Vietnam time). If the Fed only‍ cuts by 0.25 percentage points, it will cause widespread ‌disappointment. The USD may rise again,‌ thereby pushing gold prices down.

In addition to how‍ much the Fed will cut, investors are also waiting⁢ for‌ Mr. Powell’s speech ‍after the meeting. Policy signals will determine the direction of the USD, and thereby directly affect gold.

Recently, there have been many predictions‍ that gold will reach $2,700/ounce ‌in 2025. Experts⁣ from Societe Generale predict that⁣ gold will reach ‌an average of $2,800/ounce in 2025.