Gold prices are soaring, challenging the strength of the US dollar; the higher the price, the more buyers there are. Why?

Gold prices today, October 23, 2024: World gold prices have surpassed the $2,700 mark, increasing by nearly 40% in the past 12 months. Domestic gold ring prices are continuously reaching unprecedented highs – surging to nearly 88 million VND/ounce. Is the precious metal challenging the strength of the US dollar – a major shift is underway in the global financial system?

Gold price update for today, October 23, 2024

World gold prices

Thus, the price of gold has increased by nearly 40% from $1,947 per ounce to over $2,700 per ounce in the past 12 months. The euphoria in the gold market has been almost unstoppable in recent weeks, driven by factors such as geopolitical tensions and economic uncertainty. Meanwhile, market movements in Europe and China will support continued gold demand, with global demand expected to rise even further as the Chinese market enters its peak buying season.

According to the World & Vietnam Newspaper , the international gold price traded on the Kitco electronic exchange at 6:40 PM on October 22nd ( Hanoi time) was at 2,732.30 - 2,733.30 USD/ounce , an increase of 13.2 USD/ounce compared to the previous trading session.

"Interestingly, this price surge has been relatively linear, with any temporary pullback attracting more buyers," noted Mohamed El-Erian, former CEO of PIMCO and now President of Queens' College, Cambridge. According to him, this phenomenon has occurred despite significant fluctuations in interest rate policies, wide swings in benchmark yields in the US economy, falling inflation, and currency volatility.

CEO El-Erian stated that the current surge in gold prices is “not only unusual in terms of its traditional economic and financial implications,” transcending serious geopolitical influences, but also points toward a broader phenomenon – the creation of an alternative driver in the global financial system.”

Domestic gold prices continued to rise sharply, with gold rings reaching unprecedented record highs.

The price of SJC gold bars increased in line with world gold prices, pushing the selling price at Saigon Jewelry Company (SJC) and the four Big4 banks up by 1 million VND/ounce, to 87-89 million VND/ounce (buying price - selling price).

The price of 9999 pure gold rings has surged, with some places seeing increases of up to 1.7 million VND/ounce, reaching its highest level in history and approaching 88 million VND/ounce.

DOJI Group has now raised the price of gold rings to 86.6 - 87.6 million VND/ounce; Bao Tin Minh Chau has also adjusted its price to 86.2 - 87.6 million VND/ounce; SJC and PNJ companies are listing at lower levels, at 85.7 - 87.1 million VND/ounce and 86.1 - 87.1 million VND/ounce respectively.

After several days of chasing each other, the price difference between 9999 gold rings and SJC gold bars has once again narrowed to 1.62 million VND/ounce. Compared to the world gold price converted using the USD exchange rate, SJC gold bars are currently 5.09 million VND/ounce higher, while gold rings are 2.99 - 3.47 million VND/ounce higher.

Gold prices today, October 23, 2024: Gold prices surge dramatically, challenging the strength of the US dollar; why do more people buy when prices are higher? (Source: Kitco)

Summary of SJC gold bar prices at major domestic gold trading brands at the closing times of trading on October 21st:

Saigon Jewelry Company: SJC gold bars 87 - 89 million VND/ounce; SJC gold rings 85.7 - 87.1 million VND/ounce.

Doji Group: SJC gold bars 87 - 89 million VND/ounce; 9999 gold rings (Hung Thinh Vuong brand) 86.6-87.6 million VND/ounce.

PNJ system: SJC gold bars priced at 87 - 89 million VND/ounce; PNJ 999.9 pure gold rings priced at 86.1 - 87.1 million VND/ounce.

At Bao Tin Minh Chau, SJC gold prices are listed at 87-89 million VND/ounce; plain gold rings are traded at 86.2-87.6 million VND/ounce.

Gold prices rise under all "weather conditions".

Western countries should pay closer attention to the soaring price of gold, as the continued rise in the price of the precious metal reflects growing interest in alternatives to the dollar-based financial system, warned former PIMCO CEO Mohamed El-Erian.

“Something strange has happened with gold prices over the past year,” El-Erian wrote in the Financial Times . “By consistently setting records, gold prices seem to have detached themselves from traditionally influential factors such as interest rates, inflation, and the US dollar. Furthermore, the consistency in gold price increases contrasts sharply with fluctuations in key geopolitical situations.”

He said the rise in gold prices “in all weather conditions” suggests the presence of something beyond short-term economic, electoral, and geopolitical developments. “It captures the increasingly persistent behavioral trends between China and ‘middle powers,’ as well as other countries,” he said. “And that’s a trend the West should pay more attention to.”

The upward trajectory of gold prices suggests that many things may be happening in the market. Among them, the trend of central banks continuously buying gold is a key driver behind the price surge. According to expert El-Erian's analysis, such large and continuous gold purchases appear to be not only related to short-term demand, but also to a gradual diversification of their reserves away from the significant dominance of the US dollar, despite the "economic exceptionalism" of the US.

This phenomenon also appears to be related to the trend of seeking viable alternatives to the USD-based payment system – which has been at the core of the international economic architecture for the past 80 years. According to CEO Mohamed El-Erian, the phenomenon of gold overshadowing the USD in the market is not only an erosion of the greenback's dominant role but also a gradual shift in the functioning of the global financial system.

"Of course, to date, no other currency or payment system can, or is ready to, replace the USD at the core of the system, but more and more small pipelines are being 'built' around this core; and more and more countries are interested in and participating in this trend," PIMCO CEO Mohamed El-Erian commented.

Source: https://baoquocte.vn/gia-vang-hom-nay-23102024-gia-vang-tang-dung-dung-thach-thuc-suc-manh-cua-dong-usd-gia-cang-cao-cang-nhieu-nguoi-mua-vi-sao-290948.html