Closing the session on December 4, the world spot gold price stood at 2,029 USD, down 42 USD compared to the end of last week. However, compared to the peak reached right when the market opened, precious metals lost more than 100 USD. This is also gold's worst session since February.
Early yesterday, the price reached a new peak at 2,135 USD when investors were confident in the ability to reduce interest rates after comments by US Federal Reserve (Fed) Chairman Jerome Powell last weekend.
World gold prices fluctuated with a amplitude of more than 100 USD during the December 4 session.
According to CME's FedWatch Tool, investors currently only assess the Fed's likelihood of cutting interest rates in March 2024 to be 57%, down from 63% last week.
"Despite the fact that the Fed is getting closer to a policy shift, it is still too early for gold prices to maintain yesterday's peak. We need more catalysts, such as economic data. economic weakness," said Bart Melek - Director of Commodity Strategy at TD Securities.
In the year-end policy session, the Fed is expected to stop raising interest rates. The current question is when will they move to reduce interest rates and how will they signal?
Another factor putting pressure on gold is that the Dollar Index - which measures the strength of the greenback against a basket of major currencies - increased by 0.5% yesterday. This makes gold more expensive for buyers in other currencies. Yields on 10-year US government bonds also increased, making instruments that do not pay fixed interest like gold less attractive.
Last week's data showed that inflationary pressures were cooling and the labor market was less tight, reinforcing the possibility of an early interest rate cut.
This week, investors wait for the US employment report. This data will help them further evaluate the interest rate outlook.
Ha Thu (according to Reuters, Kitco)
