SJC gold hits peak while the world is in decline

The price of SJC gold bars has just broken the record of 124.4 million VND/tael while the world gold price has dropped sharply. What is the reason?

Gold is at the intersection of many major waves.

Upcoming Gold Price Movements

The world and domestic gold prices have been increasing and decreasing alternately in the past few days. On August 12, the domestic SJC gold bar price was still close to the 124 million VND/tael mark and gold rings dropped to more than 119 million VND/tael. The world gold price fell sharply, fluctuating around the threshold of 3,350 USD/ounce.

Gold expert Tran Duy Phuong said that for the past two months, the world gold price has been “stuck” in the range of 3,250-3,450 USD/ounce, with a fluctuation range of 3,300-3,400 USD/ounce. Although there have been increases, the general trend is still downward.

The main reasons come from two factors, which are US tariff policy and expectations that the US Federal Reserve (Fed) will cut interest rates.

According to Mr. Phuong, gold is sensitive to tariff information - positive signals about trade negotiations cause prices to fall, while high tariffs push prices up.

“Last week, the world gold price increased sharply when information appeared that President Donald Trump announced a 39% tax on 1 kg gold bars imported from Switzerland to the US, gold exceeded 3,400 USD/ounce. However, just one day later, the White House denied that false information, causing the gold price to drop by about 50 USD, to around 3,350 USD/ounce,” Mr. Phuong analyzed.

According to the expert, the US tariff policy has completed 85-90% of the negotiation process with major partners. The market is only waiting for the Fed to cut interest rates from now until the end of the year, but this expectation has been largely reflected in prices in the past. Therefore, these factors will hardly create a strong boost for gold in the near future.

“World prices will decline, adjust to 3,100-3,200 USD/ounce, then consolidate and accumulate to continue increasing,” Mr. Phuong predicted.

In contrast to the downward trend of world gold, the expert said that the domestic SJC gold price continuously increased and reached a new peak of 124.4 million VND/tael at the end of the session on August 8, surpassing the record level in April. Notably, in April, the world gold price was at nearly 3,500 USD/ounce, about 100 USD higher than the current price, but the SJC gold price was still higher than before.

The main reason, according to Mr. Phuong, is the scarcity of SJC gold bars. Since the end of last year, the State Bank of Vietnam (SBV) has stopped selling gold to the four major commercial banks (Big 4), causing a sharp decrease in supply. Meanwhile, the demand for SJC gold has always been high, leading to an unusually high price, despite the world trend.

Meanwhile, economist Nguyen Quang Huy, CEO of the Faculty of Finance and Banking (Nguyen Trai University) said that the current global gold picture is painted on a dark background of instability and strategic shifts.

The increasingly fierce conflict between Russia and Ukraine, the Middle East tensions that have not cooled down, and new hot spots have made gold continue to be a "safe haven". Many forecast that the Fed may enter a cycle of lowering interest rates from now until the end of the year, reducing the attractiveness of the USD and increasing gold purchasing power.

Major central banks continue to increase their gold reserves to reduce their dependence on the US dollar. Conflicts between the US and some major economies create more momentum for capital flows to move into safe assets.

With these factors, Mr. Huy assessed that the medium and long-term prospects of gold are still inclined towards an upward trend, with a higher price base than previous cycles.

However, even in an uptrend, gold prices still have sessions of downward adjustment if speculators take profits, unexpectedly stronger-than-expected economic data causes expectations of Fed interest rate cuts to temporarily subside, along with strong fluctuations in the USD and US bond yields.

According to Mr. Huy, this is not a sign of a major trend reversal, but a lull to help the market gain momentum for the next uptrend.

“Vietnam’s gold price is not only affected by world prices and exchange rates, but is also strongly influenced by limited supply due to strict import policies, along with people’s hoarding mentality and trust in SJC gold bars as domestic standards,” said Mr. Huy.

Risks of 'holding' SJC gold bars?

Gold expert Tran Duy Phuong said that the difference between SJC gold price and world gold price is currently about 16-17 million VND/tael, which is high and alarming.

This poses many risks to holders, especially in the context that the Government and the State Bank are researching solutions to narrow the gap, such as increasing gold supply to the market or ending the monopoly on producing SJC gold bars.

“The high price of SJC gold can easily create a speculative mentality. Buyers believe that it is unlikely to lose money even if the world gold price decreases. Many people also switch to buying other brands of gold. This leads to the risk of gold smuggling and negatively affects the exchange rate,” Mr. Phuong warned.

The expert said that in the coming time, domestic gold prices will still be affected by both world gold prices and domestic supply and demand factors. If world gold prices decrease, domestic gold prices will also decrease, but the level depends largely on the ability to improve supply, especially SJC.

“When the new policy is issued to solve the problem of supply shortage and narrow the gap between domestic and world prices, holding SJC gold is currently considered high risk. People can consider other types of gold with lower differences, such as 9999 gold rings from private enterprises,” Mr. Phuong recommended.

From another perspective, economist Nguyen Quang Huy noted that it is necessary to correctly identify the role of gold as a defensive “shield”, not a tool to attack profits. Therefore, it is necessary to allocate capital reasonably, the proportion of gold should not exceed 10% of the portfolio, avoid the Fomo mentality, preserve purchasing power and prevent systemic risks.

Along with that, it is necessary to closely follow information from the Fed, US economic data, fluctuations in the VND/USD exchange rate and domestic gold policy.

“Gold is at the crossroads of several major waves: global monetary policy shifts, geopolitical tensions and the need for strategic reserves. The long-term trend remains supported but the road will not be smooth. For sober investors, this is not a race. This is a test of patience, discipline and the ability to let gold ‘protect itself’ instead of being swept away by emotions and risky price zones,” he emphasized.

PV (synthesis)

Source: https://baohaiphong.vn/vang-sjc-lap-dinh-giua-luc-the-gioi-lao-doc-418763.html