In October, gold price increased by 1.76% while the stock market reversed spectacularly compared to September, continuously reaching peaks.
In the trading session on October 29, the gold price was under a lot of pressure when the dollar strengthened, the US Treasury bond yields increased, and investors were “stuck” in speculations about the economic support program from the recent recession. meeting of the US Federal Reserve (Fed) next week.
Closing the last trading session of October, spot gold on the New York market dropped 0.82% to $1,784.3 an ounce. In October, spot gold price increased by 1.76%.
The dollar index rose 0.3%, making gold more expensive for investors with other currencies.
Commerzbank analyst Daniel Briesemann commented: “From many angles, gold prices will benefit from the expectation of higher interest rates, but gold’s upside momentum will still be limited by the possibility of interest rate hikes. in the short term in the more distant future”.
The Fed is expected to announce its policy decision at its next meeting on November 2-3.
Gold is considered a tool to prevent inflation, reducing economic stimulus programs and raising the basic interest rate of the local currency often push up government bond yields and the dollar. Therefore, the attractiveness of the gold price will decrease.
As inflation shows no signs of abating, investors temporarily still see gold at current prices as an attractive asset, according to business manager at Silver Bullion fund Vincent Tie.
In October, the US stock market had its strongest month since November 2020, concerns related to the two largest businesses in the market including Apple and Amazon.com.
In the last session of October, all three US stock indexes closed at an all-time high, the S&P 500 index officially closed the 59th session of the year.
Closing the session, the S&P 500 gained 0.2% to 4,605.3 points, the index gained 6.9% in October and thus had the strongest month since November 2020. The Nasdaq index also had its strongest month since November 2020, gaining 7.3%. On the trading day of October 29, the index gained 0.3% to 15,498.3 points.
The Dow Jones Industrial Average added 0.2 percent to 35,819.5 points. The index rose 5.8% in October, the strongest month since March 2021.
On October 29, both companies warned investors that successive supply chain troubles were adversely affecting their operations. Apple said that production problems with iPhones and other products will make it difficult to meet demand for phones during the year-end shopping season.
Amazon posted third-quarter revenue that fell short of experts’ expectations. At the same time, Amazon affirmed that difficulties in the labor market and supply chain will put a lot of pressure on fourth-quarter business profits.
For months now, investors have been very worried about the risks of economic disruption and have been trying to calculate the impact of persistent inflation, labor shortages and a slowdown in the global transportation industry. demand in global markets.
Although two large enterprises on the stock exchange gave negative information, the US stock market still rallied. Despite the worries, many fund managers and market strategists said they are satisfied with the business results of many US businesses to date and also because no asset other than stocks can be used. yield better returns.
The fact that the US stock market gained strongly in October showed a spectacular reversal of the market compared to September, when the stock market dropped due to a series of worries about inflation, the real estate market. . To date, about 82% of S&P 500 businesses have posted business results that are higher than experts’ expectations, according to FactSet calculations.
Dieu Thanh (Follow Reuters, WSJ)