Reasons why buyers suffer heavy losses after 1 week

Update on the closing price of gold on February 11: Reasons why buyers suffered heavy losses after 1 week — Updated gold price closing session 11.2. Illustration photo: Phan Anh

Domestic gold price

Last week, gold prices increased sharply, however, the difference between buying and selling gold last week was too high, causing investors to suffer losses.

If you buy gold at DOJI Group in session 4.2 at the price of 78.25 million VND/tael and sell it today (February 11), investors will lose 1.7 million VND/tael. Meanwhile, those who buy gold at Saigon Jewelry Company SJC will also lose 1.4 million VND/tael.

The current difference between buying and selling gold prices is listed at 2.3 million VND/tael. This difference is considered very high. Investors face the risk of loss when businesses push the risk onto buyers.

Although domestic gold fluctuates within a narrower range than before, the price of this metal is expected to increase on the occasion of God of Wealth Day (10th day of the first lunar month). Along with that, the difference in gold price on God of Wealth Day is usually pushed higher than in other trading sessions.

World gold price

Gold Price Forecast

The latest Kitco News weekly gold survey shows that a majority of experts and investors have a positive forecast for gold prices next week.

This week, 12 analysts participated in the Kitco News Gold Survey, and Wall Street is mostly bullish or sideways for gold in the near term. Four analysts, or 42 percent, expect higher prices next week, while only one analyst, or 8 percent, predicts lower prices. Six analysts, or half of those surveyed, predict sideways prices next week.

Meanwhile, 165 votes were cast in Kitco’s online poll, with a near-majority of investors remaining bullish. Seventy-seven retail investors, or 47 percent, expect gold to rise next week. Another 37, or 22 percent, predict lower prices. Fifty-one respondents, or 31 percent, are neutral on the precious metal’s near-term outlook.

“Gold has fallen after Federal Reserve Chairman Jerome Powell dampened expectations of a near-term rate cut. Now gold may find a base and start to rally again,” said Adrian Day, president of Adrian Day Asset Management.

James Stanley, senior market strategist at Forex.com, has returned to the bullish camp after casting doubt on gold’s short-term potential last week: “So far, the uptrend has held the $2,000/ounce level. Even as the dollar had its biggest two-day rally in a year, gold has held support.”

Stanley believes the next price move will be driven by the US CPI report. “If we see core CPI rise above 4% year-on-year, that could be negative for gold. But I expect CPI to ease slightly and that could provide an opportunity for bulls,” he said.

“I expect gold to rise in the coming days, supported by weak inflation and falling US retail sales. I expect those data to limit US bond yields and the US dollar,” said Marc Chandler, managing director at Bannockburn Global Forex.

On the other hand, Bob Haberkorn, senior commodities broker at RJO Futures, sees downside risk next week: “If gold falls below $2,000 an ounce, the precious metal could return to $1,950 an ounce and possibly even beyond that.” Bob Haberkorn emphasized that the short-term direction of gold will really depend on inflation data.

Meanwhile, Mark Leibovit - publisher of VR Metals/Resource Letter said he still sees gold prices likely to fall in the near future.

US inflation data will once again take centre stage next week, with the January CPI report due on Tuesday morning, and the first January PPI on Friday, experts say.

Markets will also be looking ahead to weekly jobless claims and U.S. retail sales for January, as well as manufacturing indexes from the Philly and New York Feds, all due out Thursday morning. Then there are housing starts and building permits for January.

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