Unexpected "skyrocketing" increase

Domestic gold price today

Early this morning, the domestic gold price was almost unchanged and traded at over 66.5 million VND/tael sold. Currently, the domestic precious metal price is listed specifically as follows:

The price of SJC gold in Hanoi and Da Nang is currently 65.85 million VND/tael for buying and 66.57 million VND/tael for selling. In Ho Chi Minh City, SJC gold is still being bought at the same price as in Hanoi and Da Nang but sold at 20,000 VND lower.

DOJI brand gold price in Hanoi is listed at 65.9 million VND/tael for buying and 66.6 million VND/tael for selling. In Ho Chi Minh City, this brand gold is being bought at the same price as in Hanoi but sold at 50,000 VND/tael lower.

Phu Quy SJC gold price is listed at 65.85 million VND/tael for buying and 66.55 million VND/tael for selling. Vietinbank Gold is buying at 65.85 million VND/tael and selling at 66.57 million VND/tael.

Domestic gold price updated at 5:30 am on March 11 as follows:

Yellow	Purchase price	Selling price
DOJI Hanoi	65,900,000 VND/tael	66,600,000 VND/tael
DOJI Ho Chi Minh City	65,900,000 VND/tael	66,550,000 VND/tael
SJC Ho Chi Minh City	65,850,000 VND/tael	66,550,000 VND/tael
SJC Hanoi	65,850,000 VND/tael	66,570,000 VND/tael
SJC Danang	65,850,000 VND/tael	66,570,000 VND/tael
Phu Quy SJC	65,850,000 VND/tael	66,550,000 VND/tael
Vietinbank Gold	65,850,000 VND/tael	66,570,000 VND/tael

World gold price today

World gold prices increased sharply early this morning with spot gold prices increasing by 37.3 USD to 1,868.1 USD/ounce. Gold futures last traded at 1,867.2 USD/ounce, up 32.6 USD compared to early the previous day.

The world's precious metals were boosted by the weakening of the USD . Early this morning, the US Dollar Index, which measures the greenback's fluctuations against six major currencies, fell 0.64% to below 105 points, increasing the attractiveness of gold to buyers holding other currencies.

In addition, the gold market had a surprise increase in the last trading session of the week due to the potential risk of contagion from the crisis of Silicon Valley Bank (SVB). This famous bank in California has been experiencing a massive withdrawal of money from depositors, which is predicted to be the beginning of a much more serious problem for the banking sector.

Gold has seen significant volatility over the past three years. From below $1,500 an ounce, it has surged to a new record high above $2,050 an ounce. Liberum analyst Tom Price says the volatility in gold is relatively easy to explain.

Price explained that after the 2020 lockdowns, inflation began to emerge. Part of the reason was that economies were competing to replenish all of their goods at once. “Gold got caught up in that because people who invested in gold saw an inflationary shock coming,” Price said.

However, as the market realized that the US Federal Reserve (Fed) was serious about a rate hike cycle in 2022, gold fell 15% from its March high, fueled by the Russia-Ukraine conflict.

Speculators will only return to the gold market in the fourth quarter of 2022 as the Fed’s rate hike cycle slows down. Along with the slowing rate hike cycle, gold-friendly factors such as China easing lockdown measures and the ongoing Russia-Ukraine conflict have also emerged. These two factors have also fueled gold’s rally at the start of the new year.

However, the gold rally was short-lived as the Fed returned to its role as the dominant factor in gold's direction. The Fed's hawkish stance was reinforced after Fed Chairman Jerome Powell warned of the possibility of higher and faster interest rate hikes due to strong economic data and high inflation. "Now everyone agrees that the US economy is doing very well and the Fed will pursue its inflation target," Price described. Based on these three factors, market analysis becomes easier, according to Price.

The market is now gearing up for the Fed's March meeting in less than two weeks. According to the CME FedWatch Tool, investors have priced in a 77% chance of a 50 basis point hike. The expert noted that investors should pay attention to Powell's comments compared to the market's reaction.

With the Fed remaining more dovish than expected, non-interest-bearing gold is in trouble. “That’s the pressure gold is under right now and that explains the sell-off over the past few weeks,” Price said.

Liberum is forecasting the US economy will start slowing in the second quarter but avoid a recession this year. The bank expects gold to fall as the Fed keeps interest rates higher for longer and US economic growth falters.

Liberum forecasts an average price of $1,690 an ounce this year. The average for Q1 is $1,795 an ounce, Q2 is $1,710 an ounce, Q3 is $1,630 an ounce, and Q4 is $1,630 an ounce. By 2024, the bank sees gold stabilizing above $1,600 an ounce.

With the domestic gold price remaining almost unchanged and the world gold price anchored at 1,868.1 USD/ounce (equivalent to nearly 53.7 million VND/tael if converted at Vietcombank exchange rate, excluding taxes and fees), the difference between the domestic and world gold prices is currently nearly 13 million VND/tael.

TRAN HOAI

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