SJC sets new peak

On the morning of December 20, the price of SJC gold bars opened at over VND75 million/tael (surpassing the peak recorded on December 4) and continued to set a new peak of VND75.6 million/tael ( Doji selling price at 10:05). Compared to yesterday afternoon, the price of SJC gold bars increased by VND700,000/tael.

The price of SJC gold bars increased sharply due to the world gold price climbing last night and early this morning. However, the rate of increase in the price of SJC gold bars was faster than the world price.

Previously, on the morning of December 4, SJC gold jumped to a historic peak of nearly 75 million VND/tael when the world gold price reached a historic peak of 2,152 USD/ounce. After that, the world gold price cooled down to below 2,090 USD/ounce.

This morning, SJC gold bars reached a new historical peak of 75.6 million VND/tael, while the world gold price has just increased again to nearly 2,040 USD/ounce.

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SJC gold bar price reached a new record high on the morning of December 20.

It can be seen that the demand for exclusive SJC brand gold bars increased sharply during the peak time of gold consumption in the Asian region, including Vietnam.

The price of SJC gold bars also increased because the difference between buying and selling prices of gold trading enterprises was widened to 1 million VND/tael (buying price 74.6 million VND, selling price 75.6 million VND/tael at Doji, at 10:20 am on December 20).

The increase in gold price difference is common in the context of strong fluctuations in world gold prices and/or an increase in domestic exchange rates.

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Gold prices are expected to increase. (Photo: D.Anh)

In fact, the USD/VND exchange rate at banks has tended to increase slightly in recent sessions, from 24,400 VND/USD to 25,515 VND/USD (selling price) at Vietcombank on the afternoon of December 19.

The USD increased and the VND decreased in the context of the US greenback decreasing following signals of easing monetary policy by the US Federal Reserve (Fed) next year. In the last months of the year (lunar calendar), Vietnam usually has abundant foreign currency sources, coming from FDI, remittances, exports... but recently the State Bank has signaled to buy USD to increase foreign exchange reserves, creating a buffer for future fluctuations.

The USD buying price at the State Bank of Vietnam headquarters remained stable at 23,400 VND/USD.

Is the world about to enter a new uptrend?

After reaching a peak of 2,152 USD/ounce (converted to 64.2 million VND/tael), the world gold price adjusted down due to profit-taking pressure. The price at times fell below the threshold of 1,980 USD/ounce.

Recently, the world gold price has increased quite rapidly again and is currently around 2,040 USD/ounce (equivalent to 60.9 million VND/tael including tax and fees).

At the current price, the price of SJC gold bars is about 14.7 million VND/tael higher than the converted world price.

In the past, this was not the biggest difference. In March 2023, the domestic gold price was 17 million VND/tael higher than the converted world gold price.

There were very brief moments when domestic SJC gold bars were up to 18 million VND/tael higher than the world gold price at the same time.

This means that the price of SJC gold bars can be pushed up to about 79 million VND/tael at the current world price.

SJC gold price may increase even higher in 2024 when many forecasts in the world say that gold price may increase sharply, especially in the second half of 2024 in the context of the US reversing monetary policy.

In the latest signal, the Fed expects three rate cuts in 2024. According to the dot-plot chart, the members of the Fed's open market operations (FOMC) forecast four more rate cuts (for a total of 100 basis points) in 2025 and three more cuts in 2026, bringing the interest rate to the range of 2%-2.25%.

Countries are also rushing to consider options to loosen monetary policy.

According to Bank of America, the world will have 152 interest rate cuts in 2024. Central banks around the world are about to simultaneously turn to pumping money to boost the sluggish economy throughout 2023. Temporarily curbing inflation has had certain results.

With the global trend of lowering interest rates and pumping money, the USD is expected to fall and commodities, including gold, will increase.

Mr. Le Quang Tri, Director of brokerage at Nhat Viet Securities JSC, said that gold prices will continue to increase when the USD enters a downward trend. Besides, gold always plays the role of a safe haven when the market is unstable.

Banking and finance expert Nguyen Tri Hieu also predicted that "gold prices will continue to increase" in the current context.

According to a forecast on Kitco by Gareth Soloway, chief strategist of InTheMoneyStocks, the price of gold in 2024 could reach $2,534/ounce (equivalent to VND75.6 million/tael if calculated with the current USD/VND exchange rate). If the difference with the world price of about VND14 million/tael is added, the domestic gold price will then be VND90 million/tael, much higher than the level of VND67 million/tael in early 2023.

If this happens, gold is considered a highly profitable investment channel, with a rate of up to 15-30%/year. Meanwhile, bank savings interest rates are falling sharply, around 3-5%/year.

While the stock market is still bustling, the VN-Index has not yet reached the 1,100 point threshold. The real estate market is also in a prolonged slump.