Gold price breaks new record, oil edge up slightly, Asian stocks rise

Gold prices hit new record high

In Asian markets, gold prices jumped to record highs as the prospect of interest rate cuts from the US Federal Reserve (Fed) became increasingly evident and political instability in the Middle East threatened to escalate.

In the afternoon session on May 20 (Vietnam time), the spot gold price increased by 1.4% to 2,448.98 USD/ounce. Previously, the price of this type of gold reached a record of 2,449.89 USD/ounce and then slightly decreased. Meanwhile, the price of US gold futures increased by 1.5% to 2,453.20 USD/ounce.

According to economic experts, gold prices continue to break records because the slowing inflation trend in the US increases expectations that the Fed may soon implement its first interest rate cut in September 2024.

The dollar index remained weak, making the greenback-denominated metal more attractive to foreign buyers. Minutes of the Fed’s April policy meeting are due to be released on April 22.

Investors are awaiting comments from Fed policymakers at this meeting for a clearer view of the interest rate outlook in the coming months.

In other precious metals markets, spot silver rose 1.9% to $32.05 an ounce. It ended last week at $32.285 an ounce, its highest level in more than 11 years.

Platinum rose 0.2% to $1,083.05 an ounce and palladium fell 0.1% to $1,009.05 an ounce.

In the domestic market, at 11:00 a.m. on May 20, Saigon Jewelry Company listed the price of SJC gold at VND88.90 million - VND90.90 million/tael (buy-sell).

Oil prices rise on concerns about political instability in the Middle East

Brent crude futures continued to rise in the afternoon session on May 20, as news that the Iranian president had died in a helicopter crash and that the Saudi crown prince had canceled his trip to Japan due to health problems made markets worried about possible political unrest in major oil exporting countries in the Middle East.

Brent crude futures rose 41 cents, or 0.5 percent, this afternoon after hitting a high of $84.43 a barrel, the highest since May 10.

Because the June futures contract of US light sweet crude oil (WTI) will expire on May 21, in this afternoon's trading session, the price of this futures oil only increased slightly by 23 US cents, reaching 80.29 USD/barrel.

WTI crude oil futures for July 2023 delivery were more active, currently trading around $79.89 a barrel, up 31 cents, or 0.4%.

IG Markets analyst Tony Sycamore said King Salman's health concerns would add to the uncertainty already gripping global energy markets, after the Iranian president's death in a plane crash was confirmed.

However, China's latest economic data released on May 17 showed that the country's economic recovery is slowing down, which will likely hinder the rise in oil prices in the coming days.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, will meet on June 1. Ahead of the meeting, experts said the oil market would continue to “move sideways.”

Asian stock markets rose across the board

On the afternoon of May 20, Asian stock markets witnessed a positive trading session when most stock indexes increased points.

In Japan, the Nikkei 225 index rose 282.3 points, or 0.7%, to 39,069.68 points, reaching a five-week high.

On Chinese stock markets, the Shanghai Composite Index rose 17.12 points, or 0.54%, to 3,171.15 points.

Meanwhile, the Hang Seng index on the Hong Kong stock exchange increased by 66.47 points, equivalent to 0.34%, reaching 19,620.08 points.

The Chinese government on May 18 announced "historic" steps to stabilize the domestic real estate sector.

The People's Bank of China (PBoC) said it would facilitate an additional 1 trillion yuan ($138 billion) in liquidity for the market and local governments are preparing plans to buy back some apartments.

This boosted traders' optimism and helped the Hang Seng index hit a nine-month high.

Across the Asia-Pacific region, speculation is growing that Japanese interest rates could rise above zero, pushing Japanese government bond yields to their highest in more than a decade.

With expectations that the economic slowdown has bottomed out and inflation is cooling, European policymakers are likely to cut interest rates as early as June, taking the first step ahead of the Fed.

“Next week will be all about the Fed speakers and minutes and how they paint a picture of policy risks ahead, with a more dovish bias than the need for continued rate hikes,” said Bob Savage, head of Fed policy at BNY Mellon.

In Vietnam, in the afternoon session of May 20, the VN-Index increased by 4.47 points, equivalent to 0.35%, to 1,277.58 points, while the HNX-Index added 1.02 points, equivalent to 0.42%, to 242.57 points.