On Monday, the world’s largest gold ETF, SPDR Gold Trust, net bought about 6 tons of gold…
Illustration photo – Photo: Bloomberg.
World gold prices exploded in the trading session on Monday (September 29), with spot gold closing above $3,800/oz for the first time in history, due to a series of supporting factors including the possibility of a US government shutdown, the prospect of further interest rate cuts, and escalating geopolitical tensions. “Sharks” SPDR Gold Trust were busy net buying.
At 6:00 a.m. this morning (September 30) Vietnam time, the spot gold price in the Asian market decreased by 5.2 USD/oz compared to the closing price last night in the US, equivalent to a decrease of 0.14%, trading at 3,829.6 USD/oz – according to data from the Kitco exchange. Converted according to the USD selling rate at Vietcombank, this price is equivalent to about 122 million VND/tael, an increase of more than 2 million VND/tael compared to the weekend.
At the close of the first session of the week in New York, spot gold price reached an unprecedented high of 3,834.7 USD/oz, up 74 USD/oz compared to the closing price of the previous session, equivalent to an increase of nearly 2%.
On the COMEX floor, the price of gold for December delivery increased 1.2%, closing at 3,855.2 USD/oz.
According to trader David Meger of High Ridge Futures, hedging demand due to the possibility of an upcoming US government shutdown is one of the reasons behind this strong rally in gold prices.
Gold prices were also supported by a weaker US dollar. “The US dollar is facing a little bit of downward pressure due to the possibility of a government shutdown. That is definitely boosting the precious metals market,” Mr. Meger told Reuters.
The Dollar Index, which measures the greenback’s strength against a basket of six major currencies, fell more than 0.2% to close at 97.94.
President Donald Trump met with top Republican and Democratic leaders in the US Congress on Monday to negotiate a temporary budget bill to keep the government running through the end of the current fiscal year without funding for the next. If no agreement is reached on this issue, the federal government will shut down on October 1, the first day of the new fiscal year.
On the US economic front, the US Commerce Department’s personal consumption expenditures (PCE) price index report, the Fed’s preferred inflation gauge, came in in line with expectations on Friday. The data bolstered the case for further rate cuts at the Fed’s October and December meetings, supporting gold prices.
“Last week’s PCE report was not seen as a ‘roadblock’ to the prospect of another 1-2 Fed rate cuts. Those numbers are a supportive factor for gold and silver prices,” Mr. Meger emphasized.
In terms of geopolitics, the Russian Defense Ministry announced on September 29 that its forces had taken control of the village of Shandryholove in the Donetsk region of eastern Ukraine. Despite US mediation efforts, progress toward ending the Russia-Ukraine war is at a standstill.
Silver prices rose 1.9% this session, closing at $46.85/oz, the highest in more than 14 years.
The world gold price has increased by 45% this year, driven by many factors, including concerns about public debt and the reserve currency status of the USD. Recently, the return of strong gold buying by ETF funds has “fueled” the gold price fever.
“The demand for gold from ETFs has returned strongly, meaning there are two strong forces collecting gold, including central banks and ETFs,” a report by Deutsche Bank emphasized.
World gold price movements over the past 5 years. Unit: USD/oz – Source: Trading Economics.Nguồn: Trading Economics.
According to the Financial Times, ETFs have been net buyers of gold for four consecutive weeks, bringing their total holdings to near record highs set before the Covid-19 pandemic.
On Monday, the world’s largest gold ETF, SPDR Gold Trust, bought a net of about 6 tons of gold, raising its holdings to 1,011.7 tons of gold. Last week, the fund bought a net of more than 11 tons of gold.
The increased demand for gold is also reflected in the positions of speculators such as hedge funds. According to the most recent data from the US Commodity Futures Trading Commission (CFTC), hedge funds in the country hold a record long gold position of $73 billion.
At 6:00 a.m. this morning, Vietcombank’s website quoted the USD price at 26,181 VND (buy) and 26,451 VND (sell), down 2 VND at each end of the price compared to the same time yesterday.
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