Gold prices continued to slide on Wednesday's session (April 29), at times approaching the $4,500 per ounce level, under pressure from higher oil prices, a stronger U.S. dollar, and hawkish signals from the Federal Reserve. The SPDR Gold Trust fund posted another daily net outflow, reflecting investors' cautious outlook for near-term gold prices. At the close in New York, spot gold settled at $4,544.90 per ounce, down $52.00 per ounce from the previous session’s close, or 1.1%. Silver traded at $71.45/oz, down $1.77, or 2.4%. On the COMEX futures market, gold futures settled at $4,561.50/oz, down 1%. Intraday, spot prices briefly traded below $4,510/oz, the lowest in about a month.
Three factors weighed on gold that session. First, the monetary policy signal from the Fed. In an decision not outside expectations, after a two-day policy meeting, the Federal Open Market Committee kept the federal funds rate at 3.5-3.75%. However, the Fed's statement showed an unprecedented split since 1992, with three FOMC members opposing further rate cuts and wanting to remove the wording signaling a bias toward rate cuts. 'Three dissenters want to remove the rate-cut bias from the statement,' said Tai Wong, an independent precious metals trader in New York, to Reuters. After the statement, futures traders no longer priced in a rate cut this year, and some argued the Fed would wait longer into 2027 for another cut.
Second, inflation pressure from rising oil. The hawkish Fed policy signal mainly stems from global inflation pressures rising with oil, in the context of the Hormuz Strait being blocked and stalled efforts toward a peace agreement between the U.S. and Iran. Higher and sustained oil prices imply the Fed will keep rates higher for longer.
Brent oil futures settled in London up about 6% at $118.03 a barrel. WTI futures settled near $106.88 a barrel in New York.
Oil prices rose that session after President Donald Trump said he would maintain the U.S. naval blockade of Iran until Tehran accepts a nuclear deal. 'This blockade is even more effective than bombing... They are suffocating and things will get worse. They cannot have a nuclear weapon,' Trump told Axios.
Iran warned of 'unprecedented military action' to counter the blockade.
And third, the hawkish Fed signal also pushed the dollar higher, adding pressure on the precious metals market. The Dollar Index rose 0.34% to close at 98.97.
'Only Trump and Iran can save gold, but the two sides are not moving toward a deal, and oil prices reflect this. In this environment, the gold outlook is not bright,' said Fawad Razaqzada of City Index and Forex.com to Reuters.
World Gold Council data show global gold demand in Q1 rose 2% year-on-year, supported by strong demand for gold bars and coins, and central-bank net purchases rising 3%, offsetting a 23% drop in jewelry demand.
Toward the start of Asia trading on Thursday morning (April 30), sentiment remained negative as gold edged up slightly to around $4,560/oz and silver up about 0.6% to near $72/oz.
The price level equates to about 144.9 million VND per tael using the Vietcombank USD rate.
Caveat: The article also notes the Vietcombank USD rate at 26,108 dong (buy) and 26,368 dong (sell).
