The Prime Minister requested to reduce the gap with the world, what will happen to the domestic gold price?

After the Prime Minister directed to reduce the difference between domestic and world gold prices, many people are concerned about the development of precious metals in the coming time.

Recently, the Prime Minister requested the State Bank to strengthen management and quickly reduce the difference between domestic and world gold prices to about 1-2%, not over 10% as recently.

Forecasting the development of gold prices after the Prime Minister 's direction, Mr. Nguyen Quang Huy, CEO of the Faculty of Finance - Banking (Nguyen Trai University), said: "If the State Bank immediately implements appropriate measures to regulate the balance of supply and demand, it is entirely possible to expect that the price of SJC gold will continue to decrease more sharply in the coming weeks.

With the current large gap, it is predicted that the next decrease in domestic gold prices could range from VND4-8 million/tael within 2-4 weeks, depending on the speed of policy implementation."

According to Mr. Huy, the world gold price is currently around 3,350 USD/ounce, equivalent to about 103 million VND/tael. Therefore, the "equilibrium" price for SJC gold under ideal conditions (after calculating production costs, taxes, and brand) should fluctuate around 103 million VND/tael.

That means if it approaches the world gold price, the domestic gold price could decrease by about 15 - 17 million VND/tael.

However, according to Mr. Huy, the decline in domestic gold prices will not be sudden but will happen gradually. Because although the world gold price has decreased after reaching a historical peak of over 3,400 USD/ounce, the long-term outlook is still positive thanks to the possibility that the US Federal Reserve (Fed) will start a cycle of interest rate cuts in the third or fourth quarter.

Besides, geopolitical tensions have not shown any signs of cooling down, and buying power remains stable from central banks in many countries, especially China.

"Therefore, the world gold price will likely fluctuate in the range of 3,200 - 3,400 USD/ounce in the short term and may surpass the 3,400 USD/ounce mark again if there is a "push" from the US financial market or a geopolitical crisis. This is the factor that causes the adjustment of domestic gold prices to take place slowly.

In Vietnam, if the State Bank acts promptly, the price of SJC gold bars may adjust to the range of 105 - 108 million VND/tael within the next month and move closer to the world price level. Along with that, the gold market will stabilize again, reducing the risk of speculation and hoarding," Mr. Huy commented.

Sharing the same view, a representative of a gold trading enterprise also analyzed that if the difference between domestic and world gold prices is adjusted to 1-2%, the domestic gold price will "evaporate" from 12-13 million VND, down to below 110 million VND/tael.

He also predicted that gold prices will have unpredictable fluctuations this week. Especially when the selling pressure of customers in the market increases, it may lead to a runaway phenomenon before the State Bank intervenes, while companies limit their purchases because there is no output. At this time, the market will have a phenomenon of buying prices falling faster.

From another perspective, financial expert, Dr. Nguyen Tri Hieu, believes that if the difference between domestic and world gold prices is reduced by 1-2%, then an absolute price of 3-5 million VND/tael is reasonable.

But in reality, the world and domestic gold markets are currently separate and not very connected to each other, so reducing the difference will be difficult to do.

This difference has existed for many years and at one point SJC gold was 18 million VND/tael higher than the world gold price. The reason comes from high market demand but limited supply, because for many years the State Bank has had a monopoly on importing raw gold to produce SJC gold bars.

In 2024, when the gold price "danced", the State Bank took many measures to stabilize it, such as gold auctions or selling gold through 4 commercial banks. The solutions had an effect on the market for a while, at one point the gold price dropped by 3 million VND/tael.

But then, the price of gold continued to fluctuate strongly. Especially since the beginning of the year, the price of gold has continuously increased, at times the difference between the world and domestic gold prices reached 18 million VND/tael.

According to Mr. Hieu, gold prices will hardly decrease in the coming time because in the context of inflation, unstable international geopolitical situation, strong fluctuations in world stocks... holding gold as a safe asset is the need of most investors.

Therefore, according to Mr. Hieu, the State Bank needs to soon have solutions to increase supply to the market, thereby easily narrowing the gap with world gold prices.

Specifically, the State Bank should allow businesses to import gold and allow the buying and selling of gold accounts.

"If the two gold markets are connected, businesses are allowed to import gold and increase supply, then the gold price can decrease to close to the world price," said Mr. Hieu.

However, Mr. Hieu said that in the coming time, the world price will still tend to increase, so the domestic gold price will also increase. Specifically, the world gold price can reach 3,500 USD in 2025, and the domestic gold price will reach 123 million VND/tael in the next 3 months.

(According to VTC News)

Source: https://baoyenbai.com.vn/12/350797/Thu-tuong-yeu-cau-giam-chenh-lech-voi-the-gioi-gia-vang-tr111ng-nuoc-se-the-nao.aspx