Gold moves away from $3,300/ounce, waiting for new movement in trade negotiations

Gold prices continued to record a second consecutive weekly decline, "breaking" the $3,300/ounce mark. Expectations of easing tensions in the Middle East and the situation of tariff negotiations as the deadline for tax deferrals is getting closer are factors affecting financial markets.

Gold falls sharply, USD probes bottom waiting for monetary policy and tariff signals

At the end of the fourth week of June, the world gold price suddenly fell sharply in the last trading hours of the week, breaking the $3,300/ounce mark and closing at $3,297/ounce. This is the second consecutive week of decline for gold and also recorded the lowest level since mid-June, down more than 1% compared to the end of last week. Similarly, the nearest gold futures price on the Comex floor also fell to $3,286.1/ounce.

The easing of tensions in the Middle East has helped reduce demand for safe-haven assets. Meanwhile, investors are still waiting for new information as the deadline for the end of the reciprocal tariff suspension on July 9 approaches. This is the time when President Trump's 90-day tariff suspension on most trading partners will end, while China's tariff suspension will expire on August 12. Negotiations are ongoing with 18 countries, including the European Union, Japan, India, Vietnam, Malaysia, etc.

With only 10 days left until the July 9 deadline, new developments related to tariff negotiations are likely to gradually be revealed but are still a big unknown. Recently, regarding trade negotiations with Canada, US President Donald Trump on June 28 suddenly announced the termination of negotiations - a move related to Canada's digital services tax (DST) targeting US technology companies.

At the same time, investors are reassessing the prospects for a rate cut by the US Federal Reserve (Fed). Fed Chairman Jerome Powell said this week that the Fed could accelerate its easing cycle if there is no new inflationary pressure from tariffs . The fact that the US has not imposed new tariffs will help keep inflationary pressure low, thereby creating conditions for the Fed to carry out multiple interest rate cuts if higher tariffs are not activated after July 9.

Additionally, reports suggest that President Trump could announce his nominee for Fed chair as early as September or October this year and is likely to favor a candidate who favors looser financial conditions.

Last week, data showed the US economy contracted 0.5% in the first quarter of 2025, a faster-than-expected decline amid sluggish consumer spending due to concerns about the impact of the Trump administration's tariffs on imported goods. Meanwhile, the personal consumption expenditures (PCE) price index, the Fed's preferred inflation gauge, rose 0.1% month-on-month and 2.3% year-on-year. Economists surveyed by Dow Jones had forecast a similar increase.

Meanwhile, the USD in the international market continues to anchor at a low level. The USD Index (DXY) fell to 97.3 points, the lowest level since the beginning of 2022. The weakening USD has pushed the EUR/USD exchange rate to 1.17, the highest since 2021.

NATO's decision to increase defense spending from 2% to 5% of GDP by 2035 has raised expectations that countries, especially Germany, will ramp up borrowing to meet the target. This week, Germany approved its 2025 budget and 2026 fiscal framework, which include record investment plans to stimulate growth with increased spending and faster implementation than originally planned. Meanwhile, analysts continue to expect the European Central Bank (ECB) to cut interest rates by 25 basis points before the end of the year. After cutting rates in early June, ECB President Lagarde said the bank was approaching the end of its cycle.

Changes in some exchange rate pairs at Vietcombank last week. Unit: VND

Closing last week, the central exchange rate announced by the State Bank was 25,048 VND/USD, down 10 VND/USD compared to the peak recorded on June 24, but still 17 VND/USD higher than the end of last week . Meanwhile, the exchange rate at Vietcombank at the end of the week was listed at 25,910 - 26,270 VND/USD (buying by transfer - selling), down about 20 VND compared to last week. At some sessions during the week, banks raised the USD buying price to 26,000 VND for 1 dollar.

Meanwhile, the exchange rates with some other foreign currencies increased quite strongly. In particular, the EUR/VND and GPB/VND exchange rates both increased by more than 1%, as the euro and the British pound both appreciated against the dollar. At Vietcombank, the EUR/VND selling rate was approximately 31,400 VND to 1 euro. The JPY/VND exchange rate also increased by 0.46%, each Japanese yen is being sold by Vietcombank at 184.65 VND.

Price of SJC gold bars and gold rings at Bao Tin Minh Chau in Vietnam last week. Source: BTMC

In the domestic market, the price of SJC gold bars was under pressure to decrease following the world trend. At the end of the week, the price of SJC gold bars at SJC Company was listed at VND117.2 million/tael (buy) and VND119.2 million/tael (sell), recording the lowest selling price since June 13 under the pressure of decreasing world gold prices. During the week, the selling price reached VND120 million/tael on Thursday.

The Vietnam Chamber of Commerce and Industry (VCCI) has just sent a dispatch to the State Bank of Vietnam requesting comments on the Draft Decree amending and supplementing a number of articles of Decree 24/2012/ND-CP on the management of gold trading activities. In particular, VCCI recommends removing gold import-export licenses and individual gold import-export licenses because it will create many "sub-licenses", increasing administrative procedures and compliance costs for businesses. The amendment of Decree 24/2012/ND-CP is expected to be completed in the near future.

In addition to the opinion from VCCI, the Vietnam Gold Business Association previously proposed allowing enterprises with charter capital of VND500 billion to produce gold bars instead of VND1,000 billion. Along with capital factors, the production capacity of the enterprise, business efficiency, business reputation, brand in the market, design, quality of gold bars; the situation of compliance with state regulations related to gold trading should also be considered.

Source: https://baodautu.vn/vang-roi-xa-moc-3300-usdounce-cho-doi-chuyen-dong-moi-trong-dam-phan-thuong-mai-d316343.html