Investors appear to be in high spirits ahead of the US Federal Reserve’s monetary policy meeting, an event that could determine the market’s direction for the rest of the year…
Global gold prices hit an all-time high in Monday’s session (September 15), supported by a weaker U.S. dollar and falling U.S. Treasury yields. Investors appeared upbeat ahead of the Federal Reserve’s monetary policy meeting — an event that could set the tone for markets for the rest of the year.
At 6:00 a.m. today (September 16), spot gold in the Asian market fell by $2.3 per ounce from last night’s U.S. close, down 0.06% to $3,679.2 per ounce, according to Kitco. Converted at Vietcombank’s selling rate, this equals nearly VND117.4 million per tael, up VND1.3 million from yesterday morning.
At the same time, Vietcombank’s website quoted the U.S. dollar at VND26,166 for buying and VND26,476 for selling.
At the end of Monday’s New York session, spot gold settled at $3,681.5 per ounce, up $37.6 from last week’s close, a gain of about 1.1%.
This marked the highest closing price ever for gold futures. An intraday record of over $3,685 per ounce was also set. On COMEX, December gold futures rose 0.8% to close at $3,719 per ounce.
Monday’s rally followed a 1.7% gain last week, the fourth consecutive weekly increase.
During the session, the Dollar Index — which measures the greenback against six major currencies — fell as much as 0.3% to a one-week low, before closing down more than 0.2% at 97.34, MarketWatch data show. Because gold is priced in dollars, it tends to benefit when the dollar weakens.
Gold was also buoyed by a decline in U.S. Treasury yields. The 10-year yield slipped 2.4 basis points to 4.036%. Last week it briefly fell below 4% after new data showed the U.S. labor market weakening more than expected.
The dollar and Treasury yields fell as markets almost fully priced in a 25-basis-point Fed rate cut on Wednesday — the first since December last year. According to CME’s FedWatch Tool, futures markets assign more than a 90% chance of a 25-point cut and nearly a 10% chance of a 50-point cut.
“Expectations for a 25-basis-point rate cut are largely priced in at this stage,” said Peter Grant, senior strategist at Zaner Metals. He forecasts the Fed could deliver one or two more cuts before the end of 2025.
In the near term, Grant sees $3,700 per ounce as gold’s next target, followed by $3,730 and $3,743 per ounce.
World gold price developments over the past 5 years. Unit: USD/oz – Source: Trading Economics.
The Fed’s meeting comes as the world’s largest central bank faces unprecedented pressure from the White House. Since the start of his second term, President Donald Trump has been relentless in pressuring the Fed to lower interest rates.
The Trump administration is looking to oust Fed Governor Lisa Cook, and the Senate is considering naming Trump economic adviser Stephen Miran to the Federal Open Market Committee (FOMC), the Fed’s policy-making body. Miran’s confirmation vote is expected to take place on Wednesday.
According to analysts, if the Fed signals further interest rate cuts after this meeting, it will be a new catalyst for gold prices to increase. On the contrary, gold prices may face downward pressure if the Fed expresses a cautious stance on cutting interest rates further.
Gold prices were also supported by reports over the weekend that China may ease its gold import and export restrictions. Such a move by China would mean that both public and private demand will play a key role in gold’s upward trend, said Tai Wong, an independent precious metals trader in New York.
The world’s largest gold ETF, SPDR Gold Trust, bought a net 2 tons of gold in the first session of the week, raising its holdings to 976.8 tons of gold. The fund sold a net more than 7 tons of gold last week, but the fund’s trend in recent months has been net buying.
Source: vneconomy.vn
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