Vang SJC

Yesterday (24/8), gold edged lower but remained near a seven-week high as the dollar and shares tumbled on concerns about the Chinese economy and uncertainty over the timing of a U.S. rate rise.

Ending the session, gold prices closed at $1,154.85/ounce, down 0.5% compared with the opening price ($1,161.17/ounce).

Currently, at 3: 04 p.m. GMT+7, the price of gold is $1,148.94/ounce.

Today (25/8), gold may go up due to:

  • Commodity market continued to slip, as oil prices plunged near a record low in the past six years and the slow growth of China, the world largest consumer. The risk of deflation pull down the appeal of gold, as gold and inflation is often considered “best friends”.
  • Global stock markets begin to rise after “black Monday”. Though Chinese stocks continue to plunge sharply, according to some experts, this is the market correction and does not reflect the health of China’s economy, hence concerns seems to be exaggerated. Therefore, many investors would take the opportunity to buy cheap stocks, “ignoring” the precious metal.
  • Gold fell yesterday after an impressive week of gains as investors take profit and commodity markets plummeted. Gold prices remain under pressure and investor sentiment is still pessimistic, especially when gold prices slipped again. Therefore, many investors will not buy gold today.

However, gold prices may increase due to:

  • Chinese shares plummeted to extend the steepest four-day rout since 1996 on concern the government is abandoning market support measures. Meanwhile, disappointing manufacturing data also raised concerns over weak growth in the world’s second largest economy. Fears of global turmoil due to China led investors to look for safe-haven assets like gold and bonds.
  • Atlanta Fed President Dennis Lockhart said on Monday that the Federal Reserve will likely begin raising rates “sometime this year.” While just two weeks ago, he was “very disposed” to a rate hike in September. Prospects of a rate hike in September has faded, supporting gold prices.

Tonight, there are some U.S. news such as flash services PMI, CB consumer confidence, new home sales, Richmond manufacturing index. The positive data will support the dollar, putting pressure on gold prices and vice versa.

Forecast: Gold may go down forward $1,138/ounce. However, if the U.S. has bad news, gold may go up to $1,169/ounce.

Linh Nhan