SJC gold price "says goodbye" to historical peak, the world experiences "pain", what do experts say?

Gold prices today, September 28, 2023, continued to decline in the world market because the greenback was soaring and the yield on 10-year US bonds showed no signs of cooling down.

Domestic gold prices recorded a decrease and remained unchanged in the trading session on September 27.

DOJI gold in Hanoi and DOJI gold in Ho Chi Minh City: 68 million VND/tael for buying (down 100 thousand VND/tael compared to yesterday's price); 68.8 million VND/tael for selling (down 100 thousand VND/tael compared to yesterday's price).

PNJ Gold in Ho Chi Minh City: 56.8 million VND/tael for buying; 57.8 million VND/tael for selling (down 150 thousand VND/tael for both buying and selling compared to yesterday's price).

Closing the trading session on September 27, Saigon Jewelry Company listed the price of SJC gold at 68.1 - 68.82 million VND/tael (buy - sell), unchanged from the previous day.

World gold prices fell to their lowest level in the past 4 weeks amid the USD's rapid increase, surpassing the 106 mark, the highest level in 10 months, and the US 10-year bond yield showing no signs of cooling down.

The world gold price on the Kitco exchange was at 1,891.7 - 1,892.7 USD/ounce, down 8.7 USD compared to the previous trading session - recorded by TG&VN at 7:10 p.m. on September 27.

The US economy is currently facing a series of challenges that threaten to cause more instability, including a larger auto worker strike, a potential extended government shutdown, the reinstatement of student loan repayment programs, and rising oil prices.

Each challenge alone would not be too damaging. But taken together, they could cause more serious damage, especially as the economy cools due to high interest rates.

Moody's said the US government shutdown would damage the country's credit rating. Previously, Moody's rated the US government at Aaa with a stable outlook, which is also Moody's highest credit rating.

It is also the last major rating agency to maintain its top rating on the US after Fitch Ratings downgraded the government one notch in August to AA+ - the same rating assigned by S&P Global in 2011.

Gold price today September 28, 2023: SJC gold price 'says goodbye' to historical peak, the world experiences 'pain', what do experts say? (Source: Fxempire)

Summary of SJC gold prices at major domestic trading brands at the closing time of September 27:

Saigon Jewelry Company listed the price of SJC gold at 68.10 - 68.82 million VND/tael.

Doji Group currently lists the price of SJC gold at: 68.05 - 68.85 million VND/tael.

Phu Quy Group listed gold price at 68.05 - 68.75 million VND/tael.

PNJ system listed at: 68.10 - 68.80 million VND/tael.

SJC gold price at Bao Tin Minh Chau is listed at: 68.15 - 68.78 million VND/tael; Rong Thang Long gold brand is traded at 56.82 - 57.72 million VND/tael; jewelry gold price is traded at 56.45 - 57.55 million VND/tael.

Gold prices will increase in the long term

The head of the US Federal Reserve (Fed) in Minneapolis, Neel Kashkari, said that there is a 40% chance that the bank will have to raise interest rates “significantly” to beat inflation.

The narrative that higher interest rates will last longer appears to be overshadowing safe-haven flows into gold, said Jun Rong, market strategist at IG Yeap.

According to Jun Rong, the market must wait for a series of important data, notably the September jobs report and inflation, to provide some justification that the Fed may not raise interest rates at the next meeting and have a more flexible policy to cut interest rates if needed.

In the long term, analysts point out, the combination of central banks stepping up gold buying, led by China, along with investors still betting on a US recession, if it comes, will benefit gold even if conventional wisdom says it's time to sell.

“Our models show that $2,000 an ounce is too expensive,” said Marco Hochst, portfolio manager at Berenberg.

However, the $340 million investment fund that Hochst's firm manages still holds 7% of its assets in gold.

“In our view, gold looks much more attractive going forward. There are many different models or calculations to evaluate the value of gold, but in essence, most of them reflect the fundamentals of gold’s correlation with interest rates and the US dollar.

Typically, managers sell gold when the dollar is strong and interest rates are rising. But the recent gold price action has not been the same as it was when central banks stepped up their buying. That is why gold has not fallen," said Marco Hochst.

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