Speculative capital will leave the gold market.

Discussing the gold market trends in 2025, in a paper submitted to the "Investment Opportunities in the New Context" conference organized by Investor Magazine on March 19th, Associate Professor Dr. Tran Viet Dung and the macroeconomic research group of the Institute of Banking Science Research (Banking Academy) emphasized that gold is a special commodity, always having a strong appeal to all social classes.

Accordingly, in 2025, gold prices will continue to be influenced by both domestic and international factors.

The expert group pointed out that international gold prices continue to influence domestic gold prices through import activities. According to the World Gold Council's forecast, world gold prices are likely to maintain their upward trend in 2025, but at a slower pace than in 2024.

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People lined up in long queues to buy gold on the day the price surged to 100 million VND per tael. Photo: Thach Thao

Furthermore, the US dollar significantly impacts domestic gold prices through international gold prices and gold import costs. Given the slow global economic recovery and the forecast that the US Federal Reserve (Fed) will continue to cut interest rates in 2025, the US dollar may weaken. This would put upward pressure on international gold prices.

Conversely, a weakening US dollar pushes down the USD/VND exchange rate, thereby reducing the cost of gold imports and impacting domestic gold prices downwards.

However, the exchange rate management policy of the State Bank of Vietnam continues to play a key role in controlling exchange rate fluctuations, thereby controlling gold prices, the group of experts pointed out.

Vietnam's monetary policy, including interest rates and money supply, also affects the potential for gold investment domestically. Specifically, low interest rates can encourage people to shift their capital from savings to assets such as gold and real estate.

However, in 2025, with the economic recovery and interest rates at their lowest levels in many years, deposit interest rates are predicted to increase slightly to attract capital from the public, providing a basis for increasing lending. When interest rates rise, it will help to draw speculative capital away from the gold market.

At the same time, gold market management policies such as tightening import controls and managing the price difference between domestic and international gold prices have also reduced speculation and stabilized the domestic gold market.

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Experts predict that gold prices will depend on geopolitical factors globally. Photo: Tam An

Furthermore, many forecasts indicate that the Vietnamese stock market will flourish in 2025 thanks to expectations of market upgrade (VPBankS Research, 2024). The real estate market is also beginning a new growth cycle, supported by new legal frameworks and improved buyer sentiment. These factors will influence gold prices in a downward trend.

Will the price of gold fall to 72-80 million VND/ounce?

Regarding gold prices in 2025, Associate Professor Dr. Tran Viet Dung and the macroeconomic research team at the Banking Science Research Institute have presented three scenarios.

In the base scenario, the price of gold would fluctuate between 81-87 million VND per tael.

With a sharp increase scenario, the research team predicts that domestic gold prices could rise to 88-92 million VND/ounce by the end of 2025 and during peak periods.

However, in reality, domestic gold prices have been fluctuating wildly in recent days, following world prices. By the afternoon of March 19th, SJC gold bars were approaching 100 million VND/ounce, and plain gold rings surged to a new peak of 100.4 million VND/ounce, breaking previous records.

At this level, the price of gold also far exceeds the forecasts in the base scenario and the bullish scenario above by the research team.

Notably, in addition to the two upward scenarios, Associate Professor Tran Viet Dung and his research team also pointed out several factors that could cause domestic gold prices to fall.

Specifically, world gold prices could fall to $2,500-$2,600 per ounce due to the rapid recovery of major economies and central banks prioritizing tight monetary policies; the strong appreciation of the US dollar; and a sharper-than-expected increase in domestic interest rates, drawing money back into bank savings and reducing demand for gold investment.

Accordingly, in this scenario, domestic gold prices could fall to 72-80 million VND/ounce; and may fall further as domestic demand for hoarding and investment decreases sharply.

In the medium and long term, Associate Professor Tran Viet Dung believes that the potential for gold price increases will continue to be supported by loose monetary policy and increasing geopolitical instability globally. In addition, the continued increase in demand for gold from major central banks around the world in recent years is also a positive factor for gold prices.

Running from home to the shop, the price of gold surged by 400,000 VND/ounce . On the afternoon of March 19th, the price of gold reached 100 million VND/ounce, and long queues of people waiting to buy and sell gold resumed. One female customer noticed the price had jumped by 400,000 VND/ounce during her journey from home to the gold shop.