Gold price today September 16: Strong fluctuations when the US changes policy

Night of September 15 (Vietnam time),gold priceWorld spot gold stood around $1,955/ounce. Gold for December delivery on the Comex New York floor was at $1,971/ounce.

The world gold price on the night of September 15 was about 28.5% higher (434 USD/ounce) than at the beginning of 2020. World gold converted to the bank USD price was 55.4 million VND/tael, excluding taxes and fees, about 1.3 million VND/tael lower than the domestic gold price as of late afternoon on September 15.

Gold prices on the international market fluctuated strongly, skyrocketing and then falling rapidly as investors waited for an official change in US monetary policy following the recent directional statement by US Federal Reserve Chairman Jerome Powell.

Illustration photo.

Gold rose sharply in the early session (in the US market) due to the rapid decline of the USD amid investors' expectations that the Fed will repeat its dovish monetary policy stance, based on the average inflation target just announced in a recent meeting.

On August 27, Fed Chairman Jerome Powell said he had received a “nod” from all 17 officials of the US Federal Open Market Committee (FOMC) to abandon the practice maintained over the past 30 years of inflation control policy.

At the annual Jackson Hole online symposium, Mr. Powell said that the Fed decided to change its approach, seeking to achieve an average inflation target of 2% over time. That means that the US monetary policy-making agency accepts periods of inflation rising above this level, as long as the average over a period remains at 2%.

The US dollar fell sharply at the beginning of the session, partly due to the appreciation of the Chinese yuan following a new direction from the Beijing government and many figures showing that the Chinese economy is recovering faster than other major economies in the world after the decline due to the Covid-19 pandemic. China's industrial production value in August increased 5.6% compared to the same period last year and increased 1% compared to July.

The Fed's two-day policy meeting on September 15-16 is the first since Chairman Jerome Powell announced a policy shift toward boosting inflation and keeping interest rates low for longer.

However, gold is also under pressure to decrease due to the recovery of many stock markets, including US stocks and Chinese stocks.

Progress in testing a Covid-19 vaccine also sent gold lower.

Gold turned lower in mid-session on the New York market as its closely related commodity, oil, weakened after the Organization of the Petroleum Exporting Countries (OPEC) said that global oil demand would fall more deeply this year than previously forecast due to the impact of the Covid pandemic.

Gold Price Forecast

Many recent assessments suggest that the main factor affecting gold prices in the next few sessions is Mr. Jerome Powell's speech on monetary policy.

Accordingly, if the Fed signals further monetary policy easing, the USD will be under significant downward pressure and thereby push gold prices up. In the opposite case, gold will retreat and fall.

Uncertainty surrounding the Brexit deal between the UK and the European Union (EU) is a supportive factor for gold.

Gold prices are expected to rise on renewed hopes for new US stimulus measures, as the House of Representatives returns from its summer recess.

In the long term, gold is expected to continue to increase due to the huge amount of money that banks have pumped into financial markets over the past year.

In the domestic gold market, at the end of the session on September 15, most gold shops in Hanoi increased the price of 9999 gold by about 100-150 thousand VND in both buying and selling directions compared to the previous session.

At the end of the trading session on September 15, DOJI Gold and Gemstone Group listed the gold priceSJC in Hanoi is at: 56.15 million VND/tael (buy) and 56.72 million VND/tael (sell). Saigon Jewelry Company listed SJC gold at: 56.30 million VND/tael (buy) and 56.65 million VND/tael (sell)./.