Gold prices drop after God of Wealth Day

By Dat Nguyen   January 31, 2023 | 09:16 pm PT
Gold prices drop after God of Wealth Day
People shop for jewelry at a shop in Ho Chi Minh City on January 31, 2023. Photo by VnExpress/Thanh Tung
Saigon Jewelry Company gold price fell 0.44% to VND67.3 million ($2,869.93) per tael Wednesday morning after rising on the God of Wealth Day.

PNJ of Phu Nhuan Jewelry sold its gold at VND54.5 million per tael, unchanged from Tuesday. A tael equals 37.5 grams or 1.2 ounces.

Demand for gold often rises on God of Wealth Day (the 10th day of the lunar year, or January 31 this year), as buying gold on the day is believed to bring good fortune to business and families throughout the year.

Globally gold traded in a narrow price range as investors refrained from taking big bets ahead of the U.S. Federal Reserve’s policy decision due later in the day, Reuters reported.

Spot gold was down 0.1% at $1,925.09 per ounce.

Gold should hold above $1,900 levels heading into the Fed meeting and the Fed message needs to be heard to grasp bullion’s next likely direction, said Matt Simpson, a senior market analyst at City Index.

"There is a semi-decent chance that Powell will not deliver the dovish hike markets want... So, that leaves gold vulnerable to a bump in the road at these highs, if we see the inevitable higher dollar and yields in case Powell keeps quiet on a pause or pivot," said Simpson.

Lower interest rates tend to be beneficial for bullion, decreasing the opportunity cost of holding the non-yielding asset.

Meanwhile, data released on Tuesday showed U.S. labour costs increased at their slowest pace in a year in the fourth quarter as wage growth slowed.

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