The Fed announced that it would keep interest rates unchanged at a target range of 4.25% to 4.5% after concluding a two-day policy meeting on March 19, but still indicated the possibility of cutting borrowing costs later this year. Previously, financial markets and experts also made the judgment that Fed officials would almost certainly not act at this week's policy meeting.
Following the Fed's decision, the USD Index (DXY), which measures the greenback's strength against a basket of major currencies, rose slightly above 103 this morning. The dollar fell against the euro but then rose slightly after the Fed kept interest rates steady as expected. Fed Chairman Jerome Powell said yesterday that the Fed is facing challenges in issuing new economic forecasts amid a series of new policy developments by the Trump administration.
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| Gold and USD both rise after Fed's decision to keep interest rates unchanged |
Policymakers also updated their forecasts for interest rates and the economy for this year and the next few years, and changed the pace of the Fed’s bond-buying program. Despite the uncertain impact of President Donald Trump’s ambitious tax and fiscal policies, Fed officials said they still expect another 50 basis points of rate cuts this year.
The US central bank has recently preferred to cut interest rates by 25 bps at a time, which means officials will make two cuts in 2025. In its post-meeting statement, the FOMC noted that the level of uncertainty surrounding the current situation is increasing.
Analysts also forecast that the Fed's economic outlook also shows that inflation in the US will be higher and economic growth will be lower, so the need to find a safe haven for capital flows, gold, is still chosen by investors and speculators. Therefore, the gold market is expected to continue to go up. Notably, when investment funds hold gold in much lower quantities than during the COVID-19 period, it is creating more room for the next price increases when speculators participate in the market.
At the same time, concerns that the US tariffs could also increase inflation. Despite the price increases due to US tariffs, many believe that the Fed could start easing policy around the middle of the year. This would add momentum to the impact on gold prices.
US President Donald Trump increased tariffs on steel and aluminum imports to 25%, effective last week, and announced new reciprocal and sectoral tariffs would be imposed from April 2.
Additionally, on the geopolitical front, Russia and Ukraine accused each other of violating a new agreement not to attack energy targets, just hours after a phone call between US President Donald Trump and Russian President Vladimir Putin. Meanwhile, gold has always benefited from low USD interest rates, high inflation and geopolitical tensions in the Middle East.
In fact, gold, considered a safe investment during times of inflation or economic turmoil, has risen more than 15% year to date and has recorded a gain of about 37% since March last year. This significant increase reflects a combination of falling interest rates and a strategic shift in capital flows to gold-based assets.
Today's gold price converted according to the USD exchange rate listed at banks, world gold is priced at about 94.1 million VND/tael (excluding taxes and fees). Thus, the price of SJC gold bars is 5 million VND/tael higher than the international gold price. SJC gold bars continue to increase.
At the opening of this morning's session, SJC listed the price of gold bars at 98.6-100.4 million VND/tael (buy-sell), an increase of about 200 million VND/tael compared to the end of yesterday. SJC gold rings were also listed at 98.6-100.43 million VND/tael. Meanwhile, at Mi Hong gold shop, the price of SJC gold bars was listed at 98.5-100.5 million VND/tael (buy-sell). Not only did the price of SJC gold surpass the 100 million VND/tael mark for the first time, but it is also gradually approaching the 110 million VND/tael mark.
Financial experts say that if the international gold price continues to increase, domestic gold prices will find it difficult to stand still. However, investors need to be cautious when buying gold at the peak to avoid the risk of loss. Experts recommend not to put all their capital into buying when the price is at a record high. Investors should divide their capital into small amounts when investing in gold, observe the market to buy, and at the same time determine long-term goals instead of short-term ones. Gold is still a good channel to preserve value, but it also has potential risks if investors follow the crowd.
Because although the gold price has increased sharply, the profit that gold buyers receive is still limited and most of it belongs to gold traders, because the difference between buying and selling is relatively high, currently about 2 million VND per tael. If not calculated carefully, investors may fall into a situation where the gold price increases but the profit is not much, especially when intending to "surf".
The State Bank announced the central exchange rate of the Vietnamese Dong to the USD this morning, up 17 VND compared to yesterday, currently at 24,807 VND. The USD exchange rate at commercial banks also increased by 20 VND. The USD buying and selling rates at Vietcombank this morning were 25,340 - 25,370 VND, and the selling rate was 25,730 VND.
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