US economic data last weekend made market participants skeptical about the Federal Reserve’s ability to cut interest rates and the timing of interest rate cuts this year. This also reduces the upward momentum of gold prices.
Gold price today January 7: Doubts about the Fed’s policy cause the motivation to increase gold prices to decrease
Friday’s US jobs report revealed that payrolls increased by 216,000 jobs in December. That was much higher than economists’ initial estimate of 170,000 jobs and much higher than with 199,000 jobs added in November. This led to a strong appreciation of the US dollar as well as growth in US Treasury bond yields.
Evolution of world gold prices. Source: Tradingeconomics
These numbers make market participants skeptical about the Federal Reserve’s ability to cut interest rates and the timing of interest rate cuts this year. The US economy continues to surprise market participants and economists alike. The strong jobs report pushed expectations for a March rate cut measured by FedWatch to about 56%.
Last month’s FOMC meeting released yesterday raised questions and concerns about the timing of interest rate cuts as the minutes revealed discussion about the possibility of raising interest rates if deemed necessary, along with scenarios other potential. According to Gary S. Wagner, an analyst with FXE, this is an overreaction because the minutes record all the conversations, which of course cover many possible scenarios. According to him, investors should only focus on Chairman Powell’s speech at the press conference of the recent FOMC meeting and predictions through the dot chart.
The main highlight will come late next week with the December Consumer Price Index report. According to some economists, inflation data could underpin the Federal Reserve’s move in March. Some economists have pointed out that although consumer prices have eased from their 2022 peak, the Federal Reserve still has work to do to bring inflation down to its 2% target. Overall inflation expectations will remain at around 3%; However, core inflation is expected to remain around 4%, double the central bank’s target. This means that the room for the Fed to not think about cutting interest rates is still very high.
Gold price today January 7: Domestic gold continues to be “unmoved”
At the time of the survey at 7:45 this morning, SJC gold prices nationwide stood still in both directions. SJC gold price is currently trading at 72 and 75 million VND/tael of buying and selling.
In Hanoi and Da Nang areas, SJC gold price is listed at 72 million VND/tael purchased and 75.02 million VND/tael sold. In Ho Chi Minh City, SJC gold is still buying at the same level as in Hanoi and Da Nang areas but selling is 20,000 VND lower.
SJC gold bars are currently being purchased by Phu Quy at the price of 72.2 million VND/tael and sold at 74.8 million VND/tael, an increase of 200,000 VND on the buying side, the selling side remains the same.
At PNJ, SJC gold bar price was listed at 72.5 million VND/tael purchased and 75.2 million VND/tael, remaining stable compared to yesterday’s survey time.
Bao Tin Minh Chau also listed SJC gold at 72.05 million VND/tael and 74.9 million VND/tael for both buying and selling, the same price as at the same time yesterday morning.
The difference between domestic and world gold prices is about over 14 million VND/tael.
Unit: x1000 VND/tael
