World gold price "lost" 100 USD, widespread sell-off, experts call for Fed to urgently cut interest rates

LIVE UPDATE TABLE OF GOLD PRICE TODAY 8/7 and EXCHANGE RATE TODAY 8/7

Update gold price today 8/7/2024

World gold prices ' suffered heavy losses' but only part of a major sell-off across the market.

After a turbulent trading day, gold futures fell significantly, reflecting a market-wide sell-off that spread across many asset classes.

Accordingly, the December gold contract fell nearly $100 in this unexpected downturn, opening at $2,490.30, reaching an intraday high of $2,500.80, before facing strong selling pressure. The world spot gold price at one point fell below the $2,370 threshold.

According to the World & Vietnam Newspaper , at 7:00 p.m. on August 6 ( Hanoi time), the world gold price traded on the Kitco floor at 2,412.00 USD/ounce , up 0.6 USD compared to the previous trading session. The price of gold for December delivery increased by 8.70 USD to trade at 2,453.10 USD.

The sell-off, described as one of the worst since 2022, was fueled by growing fears of an impending recession in the US economy . Recent economic data has reignited recession concerns. Last week's jobs report showed a significant weakening of the US labor market, with the unemployment rate jumping to 4.3%, its highest level since October 2021. If the US economy falls into a recession, it would prompt the Federal Reserve to cut interest rates sooner. Some economists predict the Fed will be forced to cut rates more aggressively to support the sluggish economy .

Traders now see a 63% chance of a rate cut in September, according to CME's FedWatch tool. Lower interest rates reduce the opportunity cost of holding non-yielding gold.

Former Fed economist Claudia SahmSahm, author of the "Sahm Rule," commented on Bloomberg TV that while the US may not be in a recession yet, the risk is very close. This assessment has made investors more uneasy and contributed to the market-wide sell-off.

However, at the end of the session, when gold prices fell to a one-day low of $2,403.80 an ounce, the market saw a slight recovery as some investors viewed the drop as a buying opportunity.

The precious metals market has undergone a significant correction amid a widespread market sell-off, but its fundamental drivers remain strong: continued economic uncertainty and geopolitical tensions have not subsided, further confirming gold's role as a safe-haven asset, which is quite likely to lead to a price recovery in the near future.

Domestic gold price decreased by millions of dong in both buying and selling directions.

The price of SJC gold bars dropped sharply to 77 million VND/tael for buying and 79 million VND/tael for selling. The difference between buying and selling prices increased to 2 million VND, from 1.5 million VND yesterday.

Saigon Jewelry Company (SJC) listed the price of SJC gold bars at 77 - 79 million VND/tael, down 1.3 million VND in buying price and 800,000 VND in selling price.

DOJI Group, Bao Tin Minh Chau... adjusted the price of SJC gold bars to around 77.1 - 79 million VND/tael.

SJC Phu Quy Gold listed the price of SJC gold bars at 77.1-79 million VND/tael (buy - sell), down 1.2 million VND/tael for buying, down 800 thousand VND/tael for selling.

Converted according to the USD exchange rate at Vietcombank, each tael of world gold is equivalent to about 73.5 million VND. The difference between domestic and world prices is over 5 million VND.

Notable domestic information is that, after a temporary suspension, since the beginning of this week, Saigon Jewelry Company has been buying one-letter and dented gold bars at the same price as the two-letter type currently in circulation. The decision to buy back was made by SJC after the State Bank granted a processing limit for the amount of gold the company has in stock.

Gold price today August 7, 2024: World gold price 'lost' 100 USD, widespread sell-off, experts call on Fed to urgently reduce interest rates.

The price of 9999 smooth round gold rings decreases according to the price of SJC gold bars.

Each tael of gold ring traded at Saigon Jewelry Company is 76.15 - 77.45 million VND, down 100,000 VND compared to yesterday's closing price.

Bao Tin Minh Chau Company listed the price of gold rings at 76.28 - 77.48 million VND/tael (buy - sell).

Experts call for emergency Fed rate cut

Monday's sell-off, combined with weak economic data, has fueled concerns that the Fed has kept interest rates too high for too long, pushing the U.S. economy into recession. "The market's concern is that the Fed is behind and we're moving from a soft landing to a hard landing," said Tracy Chen, a portfolio manager at Brandywine Global Investment Management .

Nobel Prize-winning economist Paul Krugman also called for an emergency rate cut after the panic sell-off in stocks. "I don't call for a rate cut between meetings, because that might signal panic, but if it's really needed, an emergency cut should be made early."

“The Fed has been criticized for being slow to raise interest rates in the face of rising inflation. But its passivity in the face of falling inflation has been more prolonged and could be more damaging,” Krugman warned. Meanwhile, central banks in Canada and Europe have begun to ease policy.

Over the weekend, economists at Goldman Sachs raised the chance of a US recession next year from 15% to 25% but reassured that the news was not all bad as the economy continued to look “generally stable”, there were no major financial imbalances and the Fed had plenty of room to cut interest rates and could do so quickly if needed.

Fears of a wider war in the Middle East remain in the market spotlight. Israel is preparing for a major attack from Iran and its proxies after the assassination of key Hamas and Hezbollah military officials last week. Trucks carrying surface-to-surface missiles are reportedly heading to southern Syria. Convoys of weapons have been seen moving from Iran through Iraq to Syria. Iran is also reportedly moving missile launchers.

Gold is a safe haven in times of uncertainty. The precious metal tends to rise when risk assets decline. Rising geopolitical tensions and expectations of a sharp Fed rate cut should have been a boon for gold. But with markets so volatile, investors are selling yielding assets to offset leveraged losses in risky investments.

George Milling-Stanley, an expert at State Street, commented that the current economic and political situation is supporting gold prices, which could reach $2,500-2,700/ounce if the USD continues to weaken due to the Fed's interest rate policy.

Contrary to the above view, experts predict that gold prices may continue to decrease in the near future, but the long-term upward momentum of this precious metal is still there and recent price drops are opportunities for investors to buy.