World gold prices increased sharply, US stocks plunged

Each ounce of gold rose $ 26, while the Nasdaq Composite Index dropped 2.5% in just one session.

Closing session 22/2, per ounce world spot gold increased by 26 USD to 1,810 USD. During the session, the price sometimes increased to 1,814 USD, because investors expected inflation to accelerate, making money flow out of stocks and into safe assets. Weak dollar also partly supports precious metal prices.

“Investment money is flowing into gold as market participants are increasingly concerned about the rise in real interest rates, hurting stock valuations,” said Daniel Ghali, commodity strategist at TD Securities. on higher US government bond yields.

Movements of world gold prices in recent sessions.

The yield on 10-year US bonds peaked at 1 year, increasing the opportunity cost of holding gold – a fixed interest-free instrument. However, rising yields and inflation concerns have raised concerns about the value of stocks, prompting investors to turn to gold – a traditional tool to prevent inflation.

Dollar Index yesterday lost 0.4% to the lowest level in more than a month, making gold even more attractive to other currency holders. The market currently expects the US $ 1.9 trillion package to be approved by the end of this week. Fed Chairman Jerome Powell’s hearing before Congress will also take place today.

On US stock market, technology stocks fell and pulled the S&P 500 and Nasdaq Composite down yesterday. The reason is that US bond yields continuously increased, putting pressure on growth stocks. Meanwhile, investors turned to stocks that are sensitive to the health of the economy, because they bet on the possibility of US recovery. dress.

At the close of February 22, the S&P 500 lost 0.8% to 3,876 points. This is the 5th consecutive drop of this index, mainly due to the decline in technology and non-essential consumption.

Nasdaq Composite lost 2.5%, to 13,533 points, due to Tesla’s loss of 8.6%. The Big Tech team is under great pressure, with shares of Apple, Amazon and Microsoft all down at least 2%.

However, DJIA slightly increased 0.1% to 31,521 points, due to the expectation on the economic recovery. Disney increased 4.4%. Caterpillar and Dow chemical firm rose more than 3.5%. American Express and Chevron rose 3.2% and 2.7%, respectively.

Investors are concerned when US government bond yields have increased in recent weeks. This can affect companies with high growth rates, but rely on cheap capital. Increased bond yields also reduce the attractiveness of stocks in general. Meanwhile, the technology group is also sold to take profits to switch to names that will benefit when the economy recovers.

Ha Thu (According to CNBC, Reuters)


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