SJC gold price hits record of 125.4 million VND despite Fed curbing world gold's rise

Gold prices are forecast to remain on an upward trend and reach $3,600 by early 2026 due to macroeconomic risks, de-dollarization trends and strong investment demand. However, the Fed's cautious signals are holding back gold.

The price of gold bars on the morning of August 21 jumped to a historic peak of 125.4 million VND/tael, and gold rings 120.3 million VND. Photo: HH

Swiss bank UBS has just raised its gold price target for the first quarter of 2026 to $3,600 an ounce, saying that demand for this commodity this year will be the strongest since 2011.

In the trading session on August 20 (ending early morning on August 21, Vietnam time), the spot gold price increased sharply from 3,315 USD to nearly 3,350 USD/ounce, partly due to the sharp decline in US stocks and the cryptocurrency market.

International developments were quickly reflected in the domestic market. On the morning of August 21, gold prices soared to a new record high. SJC gold bars increased by 600,000 VND, to 124.4 million VND/tael (buy) and 125.4 million VND/tael (sell). Gold ring prices at Doji also set an unprecedented peak, buying at 117.3 million VND/tael and selling at 120.3 million VND/tael.

UBS analysts said persistent US macroeconomic risks, doubts about the independence of the US Federal Reserve (Fed), the trend of de-dollarization and strong investment demand - especially from exchange-traded funds (ETFs) and central banks - were the main factors driving the sharp increase in gold prices.

The bank raised its gold price forecast for the second quarter of 2026 by $200 to $3,700 an ounce.

Analysts also pointed to persistent inflation in the US, below-trend economic growth and a continued weakening of the US dollar as factors supporting gold prices.

Of note is strong demand for gold from ETFs and central banks. UBS has raised its forecast for gold ETF demand in 2025 from 450 tonnes to nearly 600 tonnes based on World Gold Council (WGC) data showing the strongest inflows in the first half of the year since 2010.

Meanwhile, central bank purchases remain strong, albeit slightly below last year’s near-record levels. UBS expects global gold demand to rise 3% to 4,760 tonnes by 2025 – the highest since 2011.

However, the gold price could not overcome the first barrier: 3,350 USD/ounce in the trading session on August 20. On the morning of August 21, in the Asian market, the gold price even decreased by 4 USD to 3,344 USD/ounce in the context that investors noticed the Fed's caution in the minutes of the latest meeting that were just announced.

However, according to analysts, the Fed meeting minutes exposed disagreement.

Previously, investors bet 99% that the Fed would cut interest rates at the September 17 meeting, but by the morning of August 21, that rate was only 82%. Notably, expectations for subsequent interest rate cuts by the Fed have also declined sharply.

Investors are awaiting Fed Chairman Powell's keynote speech at Jackson Hole on Friday, where markets will finally get a clearer direction on the Fed chief's views.

Many experts, as well as US President Donald Trump, expect lower interest rates.

Kevin Grady, president of Phoenix Futures and Options, has argued that interest rates should be lower than they are. He says the only thing preventing the Fed from cutting rates is rising inflation. But that rise, item by item, is coming from tariffs. Without tariffs, inflation would be just 2%.

Jackson Hole could be where the Fed signals a rate cut — and possibly a willingness to accept higher inflation, said Daniel Pavilonis, senior commodities broker at RJO Futures.

Daniel Pavilonis told Kitco that the only way out of this (debt) situation is to control inflation. According to him, interest rates in the US are still higher than most other countries.

However, even if interest rates are cut by 0.25 percentage points, gold could still move sideways. Pavilonis commented that gold prices are now heavily dependent on economic data and their impact on global trade activities.

Pavilonis doesn’t see any new momentum for gold yet, as “gold prices have been very high over the last few years.” So what would drive gold prices to double, or to $4,000 or $5,000? According to Pavilonis, it would be more clarity on the path of interest rates.

John Murillo, director of trading at B2BROKER, said the Jackson Hole conference could provide important signals on the path of interest rates. These signals could have a significant impact on gold prices.

Murillo cited historical data that suggests a dovish Fed, a geopolitical shock, or a sharp drop in real yields could all trigger a new rally. He also noted that technical analysis is currently showing a symmetrical triangle pattern, signaling a potential breakout could be coming soon.

PV (synthesis)

Source: https://baohaiphong.vn/gia-vang-sjc-lap-ky-luc-125-4-trieu-dong-du-fed-kiem-da-tang-cua-vang-the-gioi-518713.html