Gold prices fall sharply, interest rates remain low

Gold price fluctuates abnormally

After a sharp increase in the early morning of May 16 by VND2.8 million per tael, the price of SJC gold bars turned to decrease by VND2.3 million. On the afternoon of May 16, gold trading companies such as SJC, Bao Tin Minh Chau, Phu Quy... bought SJC gold bars at VND115.7 million/tael, selling at VND118.7 million/tael. Similarly, the price of gold rings also decreased from VND500,000 to VND1 million per tael compared to the beginning of the day. SJC Company bought at VND111.7 million, selling at VND114.8 million. Bao Tin Minh Chau Company bought at VND114 million, selling at VND117 million. Phu Quy Company bought at VND112 million, selling at VND115 million...

Gold price fluctuated sharply on May 16

PHOTO: Ngoc Thang

The sudden increase and decrease in gold prices yesterday caused many people who bought gold during the day to suffer heavy losses. Ms. Nguyen Anh (Binh Thanh District, Ho Chi Minh City) said she bought 6 taels of gold, including 2 SJC gold bars of 2 taels and 2 rings. The 2-tael SJC gold bars are quite rare, so the gold shop sells them for 120.5 million VND/tael, while the price of 3-number 9 gold rings is 115 million VND/tael. By the afternoon of the same day, the gold price dropped sharply, the afternoon purchase price was only 116 million VND/tael, with 4 taels of gold bars, she immediately lost 1.8 million VND. Similarly, the purchase price of gold rings dropped to 112 million VND, causing her to lose 600,000 VND. The total loss for the day with the amount of gold she bought was 4 million VND.

"Gold prices go up and down. Hopefully, after each decrease, the price will go up again," said Ms. Nguyen Anh. Meanwhile, the continuous decrease in gold prices in recent sessions has caused those who bought in the past 3 weeks to suffer heavy losses. Specifically, compared to April 22 when the price of SJC gold bars reached a record of 124 million VND/tael, current gold buyers have suffered a loss of 8 million VND/tael, while those who bought gold rings have suffered a loss of up to 10 million VND/tael.

Domestic gold prices fell sharply due to the sharp decline in world precious metal prices. After rising to 3,253 USD/ounce, gold prices suddenly dropped sharply to 3,194 USD/ounce and then recovered to 3,212 USD/ounce. Gold prices rose above 3,200 USD/ounce after US consumer sentiment declined and inflation continued to rise. In particular, the statement by US Federal Reserve Chairman Jerome Powell at the recent Thomas Laubach Research Conference that long-term interest rates are likely to remain high as economic conditions develop and policy adjustments have had a strong impact on gold prices.

According to the Global Economics and Market Research Department of UOB Bank (Singapore), although the timing of the Fed's interest rate cut has been adjusted to be delayed, UOB forecasts that the Fed will make three interest rate cuts, each by 25 basis points this year. The updated timing for these three cuts will be at the Federal Open Market Committee (FOMC) meetings in September, October and December, thereby bringing the policy interest rate from 4.5% to 3.75% by the end of the year.

2025. Regarding the gold market, UOB believes that safe-haven demand will continue to be maintained, along with central banks steadily increasing their gold holdings, expectations of a weakening USD and the possibility of capital flows returning to gold ETFs in the US. All these factors create positive conditions for gold prices. Therefore, UOB maintains a positive view and raises its gold price forecast to USD 3,600/ounce in the first quarter of 2026.

Savings interest rates are low

Along with the gold price, domestic savings interest rates continue to be low. During the period from April 14 to May 9, 7 banks reduced savings interest rates. The strongest reduction was VCBNeo with 0.3% for terms from 6 - 36 months at the counter down to 5.2 - 5.45%/year, terms from 6 - 60 months online down to 5.4 - 5.55%/year. Currently, the highest rate at this bank is 5.55%/year for terms from 13 - 60 months for online deposits. The remaining banks such as Indovina, VietABank, OCB ... have a slight reduction of 0.1 - 0.2%/year. The special point at this stage is that interest rates in the system are not in the same direction.

If the above banks reduce, some are moving to increase interest rates. For example, BacABank increased interest rates sharply by 0.4% for 1-9 month terms to 4.1-5.65%/year; increased by 0.2-0.3% for 12-36 month terms to 5.9-6.2%/year. In general, savings interest rates of banks are at the lowest level in many years. Currently, the Big4 group (Vietcombank, VietinBank, BIDV, Agribank ) mobilizes the lowest interest rates in the market, at 1.6-4.8%/year.

Savings interest rates are currently low.

PHOTO: Ngoc Thang

Interest rates in the interbank market have also tended to decrease in recent days. On May 14, interest rates between banks decreased by 0.2 - 0.5%/year compared to the beginning of the month. For overnight interest rates, they are 3.93%/year, 1 week is 4.08%/year, 2 weeks is 4.25%/year... In the open market, the State Bank of Vietnam (SBV) has continuously pumped money out and the volume has recently decreased compared to before. On May 16, 1 member won the bid for a volume of 363.48 billion VND for a 7-day term, with an interest rate of 4%/year. The above information shows that bank liquidity is currently quite good and banks' mobilization has grown well in the first quarter of 2025.

The State Bank of Vietnam acknowledged that interest rates will face a lot of pressure in the coming time. The reason is that lending interest rates have tended to decrease sharply in recent times; the demand for credit capital for production, business, and consumption is expected to increase strongly in the coming time to meet the economic growth target in 2025. Meanwhile, capital mobilization of the entire credit institution system may be affected and compete with other investment channels such as real estate and the stock market; as well as the world interest rate level tends to decrease but remains high and the global financial market is unpredictable after the US announced its reciprocal tax policy.

However, the operator affirmed that it will continue to maintain operating interest rates at a low level to guide the market to reduce lending interest rates to support businesses and people. At the same time, it will continue to direct banks to reduce operating costs, increase the application of information technology, digital transformation and other solutions to strive to lower lending interest rates; stabilize deposit interest rates, reduce lending interest rates to contribute to promoting economic development. As a result, lending interest rates continue to trend downward. Statistics as of April 10, the average lending interest rate for new transactions of commercial banks was at 6.34%/year, down 0.6%/year compared to the end of 2024./.

Flexible monetary policy

The State Bank of Vietnam said it will continue to closely follow market developments and the domestic and foreign economic situation to proactively, flexibly, promptly and effectively manage monetary policy, in a synchronous, harmonious and close coordination with fiscal policy and other policies, contributing to prioritizing strong economic growth associated with maintaining macroeconomic stability, controlling inflation and ensuring major balances of the economy.

According to Thanh Nien

Source: https://thanhnien.vn/gia-vang-giam-manh-lai-suat-o-muc-thap-1852505162224588.htm

Source: https://baolongan.vn/gia-vang-giam-manh-lai-suat-o-muc-thap-a195433.html