World gold prices unexpectedly plummeted, losing $80 USD, equivalent to a drop of 2.5 million VND per tael in a single day – the sharpest decline in nearly four years. What caused this dramatic drop in gold prices, and how long will the downward trend continue?
During the morning trading session on November 25th in the US market (last night in Vietnam time), the spot gold price plummeted, from $2,690 per ounce to nearly $2,610 per ounce, equivalent to a decrease of 2.5 million VND per tael (from 83.5 million VND to 81 million VND per tael).
This was a rare drop in such a short period, just a few hours. The decline occurred as the market was assessing policy signals from the new administration of Donald Trump, as well as geopolitical developments in several hotspots.
According to experts on Kitco, the decline in gold prices is primarily attributed to profit-taking pressure after the commodity surged by approximately 6.5% (around $170) last week (due to escalating Russia-Ukraine tensions). Investors are cautious as the US is about to release the minutes of the Federal Open Market Committee (FOMC) meeting, which could provide signals about the Federal Reserve's interest rate policy.
Selling pressure also increased ahead of the Thanksgiving holiday markets this weekend.
Donald Trump's choice of billionaire hedge fund manager Scott Bessent as US Treasury Secretary, instead of Howard Lutnick, is believed to be shifting market sentiment. Market observers interpret this as a signal that Trump may pursue less stringent trade policies than previously stated, particularly with China.
Scott Bessent is considered a cautious leader who prioritizes domestic tax cuts, spending reductions, and maintaining the strength of the US dollar.
According to an expert from Saxo Bank on Kitco, Bessent's reputation as a hawkish financier is likely to bring stability to the US economy . Bessent's views could alleviate investor concerns about the US debt situation, thus reducing the appeal of gold as a safe-haven asset.
In addition, the Russia-Ukraine conflict shows signs of de-escalation, and there are reports that Israel and Lebanon are preparing for a ceasefire.
The flood of news caused gold prices to plummet, triggering short-selling activity that dragged down the precious metal.
The Middle East unexpectedly received good news, and tensions in the region may ease after Israeli Prime Minister Benjamin Netanyahu approved a new ceasefire agreement with the Hezbollah militant group in Lebanon "in principle".
The parties are negotiating the details of a 60-day ceasefire, but it is the first positive sign in months.
Information from the Pentagon indicates there are no signs of North Korean troops present in Ukraine, and the fact that Congressman Mike Waltz – chosen by US President-elect Donald Trump to be National Security Advisor – has outlined the new administration's strategy for resolving the Russia-Ukraine conflict… is also seen as a positive sign.
However, geopolitical conflict remains a potential factor that could erupt at any time and push gold prices back up. Negotiations between Israel and Lebanon are only in their initial stages. The Russia-Ukraine situation continues to escalate.
Economically, investors are also awaiting the minutes of the Fed's November FOMC meeting to analyze signals regarding US monetary policy. This week, the US will release revised GDP data and core PCE personal consumption expenditure figures. This will determine whether the Fed will accelerate interest rate cuts, thereby impacting the USD and gold.
Many experts still believe that gold will continue to rise in price in 2025. Nitesh Shah, Head of Commodity Research and Macroeconomics at WisdomTree, shared on Kitco his expectation that the US dollar will weaken in 2025, thereby pushing gold prices higher.
According to this expert, during his first term, Trump's policies pushed the US dollar higher. However, this time will be different because the US budget deficit is increasing sharply. Investors are ready to return to buying gold at any time. Nitesh Shah predicts gold will reach $2,850 per ounce by the fourth quarter of 2025.
Nitesh Shah also mentioned the possibility of gold reaching $3,000, but argued that this would require a sharp drop in US bond yields.
According to Nitesh Shah, the policies that Trump mentioned, including tax cuts, will all lead to increased inflation – a positive factor for gold.
Another noteworthy point, according to Shah, is that investors are waiting for China to return to the gold market. Therefore, Beijing cannot wait for gold to fall much lower, as that would mean waiting indefinitely.
On the morning of November 26th, the price of SJC gold bars and gold rings continued to fall. The buying price of SJC gold bars decreased by another 1.8 million VND/ounce compared to yesterday afternoon, down to 82.8 million VND/ounce. The selling price decreased by 1.3 million VND to 85.3 million VND/ounce. Yesterday, SJC gold prices had already decreased by 400,000 VND/ounce.
The price of gold rings also decreased by 1.2-1.5 million VND/ounce compared to yesterday afternoon. Gold rings at Bao Tin Minh Chau Company are now priced at 82.7 million VND/ounce (buying price) and 84.6 million VND/ounce (selling price).
Gold prices today, November 26, 2024: SJC gold price plummets by nearly 2 million VND, gold rings continue their downward trend.
Gold price forecast for the next 10 days: On track to reach record highs, SJC gold and gold rings surge.
Gold price increased by 5.6 million: What is the destination for SJC and plain rings?
Source: https://vietnamnet.vn/gia-vang-lao-doc-manh-nhat-mat-2-5-trieu-sau-1-dem-lieu-co-giam-tiep-2345630.html
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