Gold Prices Take a Hit: SJC Bars Defy the Trend as Market Sees a Sharp Decline on September 4, 2024
Global Gold Prices Plummet, Yet Remain High in Vietnam
As of 8:00 p.m. on September 3 (Vietnam time), the spot gold price on the world market stood at $2,497/ounce. Meanwhile, gold for December 2024 delivery on the Comex New York floor was priced at $2,533/ounce.
The current world gold price represents a significant increase of approximately 21% ($434/ounce) compared to the beginning of 2024. When converted to the bank USD price, the world gold price equates to 76.1 million VND/tael, including taxes and fees. This is roughly 4.9 million VND/tael lower than the domestic gold price as of the end of the afternoon session on September 3.
Global gold prices experienced a sharp decline, momentarily dipping close to the $2,490/ounce threshold. The primary factors contributing to this downward pressure were the strengthening US dollar and rising US government bond yields, which had previously declined sharply. The outlook for the US economy appears more favorable than initially feared by many organizations.
The downward trend in US inflation has led observers to anticipate a potential interest rate cut by the US Federal Reserve (Fed) in the latter half of the year, possibly ranging from 0.5 to 0.75 percentage points. The first reduction is expected to occur at the meeting on September 18.
However, the current US inflation rate remains at 2.9%, which is still significantly higher than the Fed’s target of 2%.
If interest rates are cut too aggressively, the resulting monetary easing policy could lead to a rapid resurgence of inflation. Consequently, whenever there are positive signals for the US economy, investors immediately consider the possibility of the Fed delaying the interest rate cut, allowing the USD to recover.
Earlier, on August 23, the DXY index – which measures the volatility of the USD – plummeted to 100.8 points following Fed Chairman Jerome Powell’s statement at the Jackson Hole conference that “it is time to reverse monetary policy.” In late April, the DXY stood at 106.25 points, and on July 9, it surpassed 105 points.