Will gold prices continue to surge to their limit, or is a bubble forming, with a sharp correction imminent?

Gold prices today, October 18, 2024: World gold prices reach an all-time high. Domestic gold prices remain stable at their peak, with gold rings continuing to set records at over 84 million VND per tael, yielding a profit of up to 33%. So, has the gold price reached its ceiling or is it in a bubble?

Gold price update for today, October 18, 2024

Global gold prices have surged dramatically and are still on track to reach new highs.

According to the World & Vietnam Newspaper , the international gold price traded on the Kitco electronic exchange at 6:30 PM on October 17th ( Hanoi time) was at 2,687.00 - 2,688.00 USD/ounce , an increase of 12.8 USD/ounce compared to the previous trading session.

Gold prices on the international market surged dramatically despite the strengthening US dollar, as the global geopolitical situation heated up in many regions, with the US presidential election approaching (November 5th), tensions in the Middle East continuing to escalate and potentially spread; and the Korean Peninsula experiencing a tense week... With a series of uncertainties as mentioned above, capital tends to flow towards safe-haven assets, including gold.

While the sideways trading pattern of recent weeks may have caused some concern among gold speculators, the reality is that the upward trend of the precious metal is still receiving a lot of support and the price is not yet believed to have peaked.

According to data from expert Ronnie Stoeferle, Managing Partner at Incrementum, “+28.1%, +27.2%, +28.3% – is the impressive performance of gold in the first nine months of this year in USD, Euro, and Swiss Franc terms.” Even more impressive are the year-on-year performance (up to the end of September), with corresponding figures of +42.3%, +35.0%, and +31.1%.

With such impressive increases, the question always arises: "Has the price of gold reached its peak, or is it even in a bubble, like in the early 1980s, and is a significant correction imminent?"

Domestic gold prices remain at peak levels, while gold ring prices set a new record.

Following a sharp surge on October 16th, SJC gold bar prices continued to stabilize, maintaining a peak of 84-86 million VND/ounce (buying price - selling price) at major gold trading brands such as Saigon Jewelry Company, DOJI Group, Phu Quy, and Bao Tin Minh Chau...

The price of 9999 pure gold rings reached a new record high of 84.45 million VND (selling price), an increase of nearly half a million VND per tael on the morning of October 17th. Major gold ring retailers simultaneously adjusted their prices to new record highs. Thus, in just a few days, each tael of gold ring has increased by approximately 1 million VND. Furthermore, since the beginning of the year, gold rings have recorded a return on investment of over 33%.

Saigon Jewelry Company (SJC) adjusted the price of gold rings to 82.9 - 84.1 million VND. Phu Nhuan Jewelry Company (PNJ) raised the price of gold rings to 83.3 - 84.3 million VND. DOJI Group and Bao Tin Minh Chau increased the buying and selling price of plain gold rings to 83.45 - 84.45 million VND/ounce.

Based on the USD exchange rate, the world gold price is currently around $2,677 per ounce, equivalent to 81.7 million VND per tael. Therefore, the domestic price differs from the world price by approximately 2.5-4.5 million VND per tael.

However, currently in Vietnam, it is not easy for people to buy plain gold rings or gold bars. Plain gold rings from many major brands are frequently out of stock. Registering to buy gold bars at the 5 units authorized by the State Bank of Vietnam is also difficult, time-consuming, and the maximum quantity is only 1-2 taels.

Gold prices today, October 18, 2024: Gold prices continue to surge to their highest level; the upward cycle is not over yet, a significant correction may be imminent? (Source: Kitco News)

Summary of SJC gold bar prices at major domestic gold trading brands at the closing times of last weekend's trading sessions (October 12 ):

Saigon Jewelry Company: SJC gold bars 84 - 86 million VND/ounce; SJC gold rings 82.9 - 84.1 million VND/ounce.

Doji Group: SJC gold bars 84 - 86 million VND/ounce; 9999 gold rings (Hung Thinh Vuong brand) 83.45 - 84.45 million VND/ounce.

PNJ system: SJC gold bars priced at 84 - 86 million VND/ounce; PNJ 999.9 plain gold rings priced at 83.3 - 84.3 million VND/ounce.

Phu Quy Gold and Silver Group: SJC gold bars: 84 - 86 million VND/ounce; Phu Quy 999.9 round gold rings: 82.5 - 83.45 million VND/ounce.

At Bao Tin Minh Chau, SJC gold prices are listed at 84-86 million VND/ounce; plain gold rings are traded at 83.45-84.45 million VND/ounce.

Could gold prices rise even higher?

Ronnie Stoeferle, Managing Partner at Incrementum, said he doesn't believe precious metal prices are in a "bubble" and there are compelling reasons why gold isn't actually overvalued.

According to Ronnie Stoeferle's analysis: "Firstly, although the price of gold has increased by more than 30% to over $2,600 in less than six months, even if this yellow metal reaches a trading level above $2,675/ounce in the spot market, when adjusted for inflation, gold has not yet reached its all-time high. Therefore, according to this expert, 'concerns that gold prices will undergo a sharp correction at present are unfounded'."

Another positive sign suggesting that gold prices could rise further is that the current rally is much more stable and sustainable than the rally in the late 1970s. Importantly, a key factor supporting the rally is the continued high demand for gold; a third major driver supporting gold is falling interest rates, contributing to the price increase; and the next reason for further price increases is the current geopolitical environment, which shows no signs of cooling down anytime soon.

Since the beginning of the year, world gold prices have increased by nearly 30%. However, many forecasts still suggest that gold will surpass $2,700 per ounce by the end of this year and could reach $3,000 per ounce by early 2025. Nevertheless, many experts have recently become less optimistic about the upward trend of gold prices. Experts recommend that investors only allocate a small proportion of their portfolio to this safe haven, especially given the recent sharp increase in the price of the precious metal.

In addition, significant profit-taking pressure on gold is also warned to be present whenever gold climbs close to its record high of $2,685 per ounce, as recorded on September 26th.

Source: https://baoquocte.vn/gia-vang-hom-nay-18102024-gia-vang-tiep-tuc-tang-kich-tran-hay-dang-bong-bong-sap-xay-ra-mot-dot-dieu-chinh-manh-290367.html