Gold prices in Vietnam have rebounded, reflecting a technical recovery after a series of declines. On September 29, major domestic brands listed gold prices between 139.5 million and 142.5 million VND per tael, with an increase of 100,000 VND compared to previous prices. The difference between buying and selling prices remains around 3 million VND per tael.

This recovery in domestic gold prices coincides with a similar trend in the global market, where spot gold is currently trading around $4,141 per ounce, up 0.06% from the previous session. When converted at the current exchange rate, excluding taxes and fees, global gold is equivalent to about 130.6 million VND per tael, which is approximately 12 million VND lower than domestic prices.

Internationally, gold prices have edged up after hitting a seven-week low on September 28. The pressure from the sell-off of US Treasury bonds has somewhat eased, despite ongoing expectations that the Federal Reserve will continue tightening monetary policy to control inflation. At one point, gold prices increased by about 0.6%, surpassing $4,140 per ounce, after a significant drop of up to 4% in the previous session.

The yield on 10-year US Treasury bonds remains around 5.23%, after reaching a 19-year high on September 28, amid diminishing hopes for a diplomatic breakthrough in the Middle East. Gold has dropped nearly 7% in September, despite peaking at $4,510 per ounce earlier in the month. The downward pressure has intensified following the Federal Reserve's first interest rate hike of 2023 to combat persistent inflation, signaling potential further increases.

High energy prices are also raising the risk that the Fed may need to maintain a tighter monetary policy for an extended period, which is unfavorable for gold, a non-yielding asset. Currently, the market is pricing in a 70% probability that the Fed will raise interest rates again in October.

Charu Chanana, an investment strategy director at Saxo Markets in Singapore, noted that gold has lost a key support level around $4,230 per ounce. She indicated that if bond yields remain high, the $4,000 per ounce level—previously seen in June and July—could become the next psychological and technical challenge.

Inflationary pressures continue to be a focus for Fed officials. Fed Governor Lisa Cook suggested that productivity improvements from artificial intelligence may not be sufficient to offset short-term price pressures. She also noted that a strong wave of investment in data centers is increasing competition for resources such as energy and construction labor. Electricity and water costs in the US have risen about 5% over the past year, according to her data.

Investors are currently awaiting the US personal consumption expenditures (PCE) data, a closely monitored inflation measure by the Fed, along with the non-farm payroll report for additional signals regarding the interest rate trajectory.

Analysts at China Zheshang Bank believe that significant trading activity has formed around the September peak, which could create selling pressure as prices recover. Investors who purchased gold at high prices tend to seek to exit their positions during market recoveries, limiting the potential for short-term breakthroughs.

According to this analysis group, for the long-term narrative of the USD depreciation trend to influence gold prices again, the market needs a new macro catalyst.

As of 11:42 AM Singapore time, spot gold rose 0.6% to $4,140.21 per ounce. Silver prices increased by 0.2% to $60.79 per ounce after a nearly 6% drop in the previous session. Platinum prices fell, while palladium saw a slight increase. The Bloomberg Dollar Spot Index, which measures the strength of the USD against a basket of currencies, remained relatively stable after rising 0.3% in the previous session, closing at its highest level since July 29.