Gold prices are expected to continue to increase strongly in 2024

4 factors affecting domestic gold prices

“The factors affecting domestic gold prices are SJC liquidity, domestic supply and demand, USD/VND exchange rate on the free market and world gold prices,” said Mr. Nguyen Minh Tuan - CEO of AFA Capital, Founder of TOPI application.

Explaining the liquidity story of SJC gold bars. This expert said that gold bars are produced by SJC Company according to standards, this is a national gold brand managed by the State Bank. With the current gold market management regulations, Vietnam is not producing more SJC gold bars, so the liquidity of SJC gold is one of the factors affecting the gold price. When many people have the same demand to buy but the supply is limited, the price can be pushed up at times.

What is the scenario for gold price in 2024?

Geopolitical tensions and central bank buying are two of the key drivers that will keep gold demand rising through 2024, the World Gold Council said.

According to experts from the World Gold Council, there are 3 scenarios. World economic growth will directly impact gold prices in 2024.

In the first scenario, if the US economy makes a soft landing, avoiding recession, GDP decline and inflation are both mild, without a major crisis, gold will be supported to maintain at current levels. The FED may cut interest rates twice in 2024. According to experts from the World Gold Council, although the majority of the market supports the FED to make a soft landing, this is not an easy task. Historically, the FED has only made soft landings twice after nine tightening cycles in the past five decades. The remaining seven countries ended in recession. This is not surprising: when interest rates remain high for a long time, pressure will increase on financial markets and the economy in general.

Scenario 2, the US economy has a hard landing and falls into recession. This will be a good environment for gold. The demand for safe haven gold will flourish. The FED will be forced to cut interest rates to support the economy.

In the third scenario, assuming the US economy grows steadily without any signs of recession, gold will come under downward pressure.

Many people mistakenly believe that people's purchasing power is the major factor affecting gold prices. However, in reality, central banks are considered the largest investors in gold.

The World Gold Council's Gold Demand Trends Report for Q3/2023, just released, shows that central banks continued to maintain a record pace of gold purchases, bringing global gold demand in Q3 (excluding the OTC market) to 1,147 tons, 8% higher than the 5-year average.

According to data from the World Gold Council, central banks of countries such as Poland, Singapore, Türkiye, Russia, China and India are the “big guys” in the gold market.

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