Gold prices plummet.

The global gold market has just witnessed a rare price drop, falling by approximately $100 per ounce, from a high of $2,740 per ounce to nearly $2,640 per ounce, following news that the Republican candidate had won the US presidential election for a new term.

Prior to the election, a price drop occurred as many signals indicated an advantage for Donald Trump. From its historical peak of $2,789 per ounce (86.4 million VND per tael) recorded on September 30th, gold fell to $2,740.

At the beginning of 2024, the price of gold was only $2,063 per ounce. By the end of October, the increase was over 35%.

Gold fell sharply amid a relatively rapid rebound in the US dollar. Investors believe the US economy will surge, and America's position will be stronger under Donald Trump. Countries that do not use the US dollar in international transactions should be wary of the 47th president's declaration of "100% tax on countries that abandon the dollar."

Over the years, the US dollar's position has weakened and is projected to continue this trend as many countries, including Russia and China, reduce transactions in US dollars and decrease their reserves of the US currency.

The expansion of the BRICS group of emerging economies, with the addition of five new members – Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE) – in early 2024, alongside existing members Russia, India, China, and South Africa, has led many to question the position of the US dollar.

At the most recent forum (held from October 22-24), Russian President Vladimir Putin appeared at the BRICS summit with an unusual banknote in his hand, which has not yet convinced investors about the imminent creation of a new common currency. However, it has also affected the outlook for the US dollar.

The outlook for gold also dimmed after the US elected a new president. In his victory speech, Donald Trump declared he would end wars and did not want to use the military. During his 2017-2021 term, the US under Trump hardly participated in any major new armed conflicts, except for defeating the Islamic State (IS) in record time.

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The price of gold rings sometimes dropped by 5-6 million VND per tael (approximately 37.5 grams). Photo: MH

Previously, Trump had repeatedly stated that he would end the conflict between Russia and Ukraine "within 24 hours" if elected, even before officially taking office as president.

This is negative news for gold. Gold typically rises in price when geopolitical tensions escalate.

The plunge in gold prices may also be due to money flowing into more investment channels. Immediately after news of Trump's election victory, the cryptocurrency market surged, with Bitcoin rising from $69,000/BTC to nearly $77,000 at one point and currently at $76,000.

The US stock market surged, repeatedly reaching new highs. Investors expect money to flow into the US, into manufacturing sectors, and for the US economy to accelerate.

Will gold fall further or rebound sharply?

It is expected that Mr. Trump will be inaugurated as president on January 20, 2025, which is just over two months away.

The question is, what will the outlook for the gold market be? Will gold prices continue to fall sharply, decline slightly, or rebound strongly?

With a price of $2,692 per ounce as of 8:45 PM on November 8th (Vietnam time), gold has fallen nearly 3.5% from its peak of $2,789 per ounce recorded on October 30th. However, compared to the beginning of the year, the price of gold is still up 30.5%.

Thus, it can be seen that the correction has not been significant. There have been predictions that gold could correct downwards to $2,500 per ounce, equivalent to a decrease of about 10%, before rebounding towards the end of the year and in the following year. However, the number of predictions for gold reaching $2,500 is not large.

Most forecasts from leading global organizations such as Goldman Sachs, the World Bank, and the WGC suggest that gold is still in an uptrend, especially as the US Federal Reserve (Fed) has just begun its interest rate reduction cycle.

In fact, during an uptrend, corrections of 5-7%, or even 15%, are not uncommon for many commodities. But with gold, a 10-15% drop is not significant, because the general trend for gold is to increase in price in line with global inflation.

The price increase since the beginning of the year has been substantial, at times reaching 35%; and compared to mid-November 2023, the increase has at times been as high as 43%. A correction of 8-10% is also possible, especially in the context of the new US president, Mr. Trump. In 2022, the price of gold fell by 8-9%.

Some experts argue that the 100-point drop in gold prices on November 6th was an overreaction to the US election results. However, considering the overall picture, with a relatively small decrease of less than 3.5% (after a 35% increase since the beginning of the year), this is not a significant figure.

However, with the US dollar trending downward, inflation may increase as many countries lower interest rates and increase money printing, and gold will be supported from falling too deeply.

On the morning of November 8th (Vietnam time), world gold prices surged by approximately $55, rising from a low below $2,650 to above $2,700 after the Fed cut interest rates for the second time, by 0.25 percentage points. However, gold subsequently fell back to the $2,680-$2,690 per ounce range.

In the long term, gold is projected to continue rising, potentially reaching $3,000 per ounce in 2025. However, in the short term, the gold market may experience significant volatility, with downward pressure remaining due to statements and/or policies from Mr. Trump.

Gold prices after the US election: Forecast for the next 10 days and 2025 - Will gold prices rise? The price of gold rings and SJC gold bars fell sharply in line with global gold prices amidst investor concerns about significant asset price volatility following the US election. However, gold may rise in the next 10 days and in 2025.