Gold prices surge as Fed signals slower rate hikes
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Gold prices rose as soon as the U.S. Federal Reserve announced that it may slow the pace of interest rate hikes in the future. The price of SJC branded gold bars surged VND100,000 ($4.04) from the previous day to VND67.6 million per tael. A tael is equal to 37.5 grams or 1.2 ounces.
The selling price of gold rings also increased by VND200,000 to VND54.1 million per tael.
SJC gold prices are typically higher than the world average by some VND15.5 million per tael
The minutes of the Fed’s Nov. 1-2 meeting showed that a “substantial majority” of Fed policymakers agreed it would “likely soon be appropriate” to slow the pace of interest rate hikes.
Fed fund futures are now pricing in an 85% chance of 50-basis point (bps) increase in the December meeting, after four straight 75 bps hikes.
Globally, gold prices bounced above the key $1,750an ounce level on Thursday, consolidating gains after minutes of the U.S. Federal Reserve’s latest meeting signalled slower interest rate hikes.
Spot gold rose 0.4% to $1,755.73 per ounce by 0321 GMT. U.S. gold futures advanced 0.6% to $1,755.90.
Questions & Answers
Q.What specifically caused the recent rise in gold prices?
What specifically caused the recent rise in gold prices?
Gold prices increased after the U.S. Federal Reserve indicated it might reduce the speed of its future interest rate increases. This signal came from the minutes of their early November meeting, where most policymakers agreed to slow the pace.
Q.By how much did SJC branded gold bars and gold rings increase in price?
By how much did SJC branded gold bars and gold rings increase in price?
SJC branded gold bars rose VND100,000 to VND67.6 million per tael. The selling price of gold rings also increased by VND200,000, reaching VND54.1 million per tael following the news.
Q.How do SJC gold prices typically compare to the global average?
How do SJC gold prices typically compare to the global average?
SJC gold prices are generally higher than the world average. The article states they are typically more expensive by some VND15.5 million per tael, showing a significant premium in that market.
Q.What is the likelihood of a specific interest rate increase at the Fed's December meeting?
What is the likelihood of a specific interest rate increase at the Fed's December meeting?
Fed fund futures are currently indicating an 85% chance of a 50-basis point increase at the December meeting. This follows a period of four consecutive 75 bps hikes by the U.S. Federal Reserve.
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