As of the close of trading on February 27, the spot price of gold in the world increased by 94 USD to 5,278 USD per ounce. This is the highest level since the session on January 30. The market rose mainly due to geopolitical tensions between the US and Iran and a decrease in US government bond yields.
“Concerns about geopolitical issues remain significant. The likelihood of military intervention this weekend is still high. Therefore, investors have bought gold as a safe haven,” said Phillip Streible, a market strategist at Blue Line Futures.
Domestic gold prices this morning also increased in line with the global market. The buying and selling price of gold bars at Saigon Jewelry Company (SJC) rose by 3 million VND to 184 – 187 million VND per tael.
The US and Iran made progress in negotiations on February 26, according to a representative from Oman, the country mediating the talks. However, the negotiations ended without any breakthroughs to completely eliminate the possibility of a US attack on Iran. Meanwhile, the US Embassy in Jerusalem has allowed non-essential staff and their families to leave Israel due to security risks.
The yield on the US 10-year Treasury bond fell to a three-month low on February 27. This makes gold – a non-yielding asset – more attractive.
The precious metal also recorded an increase of nearly 8% in February. This marks the seventh consecutive month of rising gold prices.
Streible noted that the next target for gold could be 5,450 USD, with a key support area around 5,120 USD. The latest data shows that the US Producer Price Index (PPI) rose faster than expected in January. This suggests that inflation is likely to accelerate in the coming months.
The market currently expects a 42% chance that the Federal Reserve (Fed) will cut interest rates by another 25 basis points in June.
In the physical market, China’s gold imports through Hong Kong increased by nearly 70% in January compared to December. China is currently the world’s largest gold buyer.
In addition to gold, silver prices also rose by more than 6% to 93.6 USD. Platinum prices increased by 3.5% to 2,361 USD. In contrast, palladium slightly decreased to 1,771 USD per ounce.