Gold slips to $4,513 as Fed tightening bets weigh on prices

Spot gold slipped 0.1% to $4,513.18 a troy ounce in Asian trade, holding above the $4,500 mark after a 3% surge the prior session lifted prices to a near three-month high.

Gold faces headwinds from expectations that Federal Reserve officials may tighten policy if inflation does not ease, Tony Sage, executive chairman at Critical Metals, said. A higher interest-rate environment typically weighs on the non-yielding metal, he added.

The July FOMC minutes showed three officials dissented in favor of a 25-basis-point rate hike, keeping the federal funds rate at 3.50%-3.75%. The US Treasury's decision to double its planned debt buyback to $4 billion pushed long-term yields lower, giving gold support even as the Fed's tone stayed hawkish, according to the minutes released Aug. 20.

Gold last traded above $4,524 on Aug. 20 after climbing from $4,343. A sustained close above $4,500 would signal strength, while a break below $4,490 could trigger profit-taking toward $4,450-$4,470, with US jobs and inflation data the next catalysts.

Domestic SJC gold jumps 3.3 million VND

While global prices held steady, Vietnamese gold bars surged. SJC gold rose 3.3 million VND to 146 million VND an ounce, with buying at 143 million VND, after falling 1.6 million VND the prior session. DOJI in Hanoi and Ho Chi Minh City, Phu Quy SJC, and BTMC SJC all matched the 143-146 million VND range, while BTMC VRTL and BTMH reached 147 million VND on the selling side.

The buy-sell spread held at 3-4 million VND an ounce, meaning a buyer at 146 million VND would need prices to climb further to offset the gap. The domestic move reflects a delayed adjustment to the global rally rather than fresh international demand, narrowing the gap between brands to about 1.1 million VND from 3.9 million VND a day earlier.

Fed minutes leave gold balancing two forces

The minutes showed policymakers viewed labor-market conditions as stable but flagged inflation risks tilted to the upside, with several officials arguing financial conditions may not be restrictive enough to return inflation to the Fed's 2% target. Fed Chair Kevin Warsh also proposed cutting scheduled FOMC meetings to six per year from 2027.

OCBC strategists warned gold faces pullback risk as higher US Treasury yields and firmer oil prices create headwinds, with Brent elevated on US-Iran tensions that could complicate the inflation outlook. Rania Gule, market analyst at XS.com, said the hawkish Fed minutes alone are unlikely to reverse the broader uptrend as long as Treasury yields and the dollar fail to rise together.

Gold at $4,513 is roughly 0.2% below the Aug. 20 peak of $4,524 and compares with the psychological $4,500 support. The next test comes with US initial jobless claims and the Philadelphia Fed Manufacturing Index due Aug. 21, with softer readings likely to fuel bets on a less hawkish Fed.

This article is for informational purposes only and does not constitute investment advice.