World Gold Council assesses year-end gold market outlook

Mr. Shaokai Fan, Director of Asia-Pacific (excluding China) and Director of Global Central Banks at the World Gold Council (WGC), recently answered questions from the press about the latest developments in the gold market and the outlook for the gold market until the end of the year.

Mr. Shaokai Fan, Director of Asia- Pacific (excluding China) and Director of Global Central Banks at the World Gold Council, talks to the press. Screenshot

Mr. Shaokai Fan said that the US and China reaching an initial agreement to suspend tariffs immediately affected gold prices. This is also in line with expectations because gold prices have fluctuated recently mainly due to trade tensions.

This is a positive step, although the agreement does not remove the barriers that have been erected since Donald Trump took office. It is too early to say what the impact will be, but we will have to see what happens after 90 days. He feels that the US is now adopting a more moderate approach to trade.

At the moment, trade tensions are the dominant factor and affect gold more than any other factor. Everything will depend on the US's long-term stance and how the market perceives, evaluates and interprets each relationship between countries, the dollar and US bonds.

Regarding the outlook for the gold market for the rest of the year, he said that central banks slowed their gold purchases in the first quarter of this year, but overall purchases remained strong. There is still room for further purchases as gold currently accounts for only 5-10% of central bank reserves. The WGC is conducting its annual survey of central banks, with results due by the end of June.

The forecast of capital inflows into gold ETFs (exchange-traded funds) in April has ended the period of strong capital inflows. May could be the opposite trend, capital outflows.

In the medium and long term, US inflation will also affect gold prices. If inflation increases, it will easily lead to the risk of recession and the reaction of the US Federal Reserve (Fed).

"Trade negotiation policy is the dominant factor for the remaining months of this year, but everything needs time to answer. Everything is still unpredictable and investors may look to gold to preserve value in the context of many uncertainties" - Mr. Shaokai Fan assessed.

Gold price differential will continue

In Q1-2025, the demand for investment in gold bars and gold coins increased more strongly in ASEAN markets, but Vietnam was an exception. This demand decreased by 15% compared to the same period last year due to limited supply of gold products, pushing the gold price gap to a high level, on the basis that Q1-2024 had the highest gold investment level in the past 10 years. However, Vietnam still recorded an increase of 46% compared to Q4-2024. The consumption of gold jewelry increased by 5% compared to Q1.

"It should be noted that the decrease in demand is due to price factors, not consumer psychology. The same is true in the world. On the other hand, the weakening of the domestic currency further increases the price of gold in dollars, affecting the affordability of buyers," Mr. Shaokai Fan assessed.

In addition to the international trade story, gold's outlook also depends on domestic factors, such as the local currency, or alternative investment channels such as real estate and stocks.

"WGC does not forecast gold prices, but it can be said that the demand for gold investment is still very strong. Vietnam has a different management method from other countries, so it is difficult to say exactly how gold prices will develop, but currently the difference between Vietnamese and international gold prices will continue in the coming time," he said.

Advice to gold investors

He also warned gold investors that the gold price cycle is now shorter. "Changes happen suddenly and daily, for example the US and China announcing a temporary suspension of tariffs. Such factors will cause the gold price to fall, we need to get used to rapid changes," he advised.

The advice for individual investors is to take a closer look at the role of gold and increase their portfolio to withstand the many fluctuations in today's market. Stability is getting worse and uncertainty is increasing. Despite positive news in the short term, no one knows what will happen tomorrow. Investors should always be ready for the unexpected in the future.

Source: https://nld.com.vn/hoi-dong-vang-the-gioi-danh-gia-trien-vong-thi-truong-vang-cuoi-nam-19625051418585207.htm