Why do domestic and world gold prices simultaneously increase?

Domestic and international gold prices have increased sharply, with SJC gold currently surpassing VND133 million/tael. The main reason is supply and demand in the market and expectations of changes in US monetary policy.

Domestic gold price today (September 3) set a new record after many consecutive increasing sessions, currently SJC gold price reached 131.9 - 133.4 million VND/tael (buy - sell), while world gold price also increased to 3,540.6 USD/oz (equivalent to about 114.9 million VND/tael).

Domestic gold prices set a new record high. (Illustration photo: Huy Phuong/VOV.VN)

Overall, since the end of 2022, gold prices have increased by more than 90%. According to market analysts, demand is expected to remain strong for a while due to many reasons, including supply and demand in the market. In Vietnam, limited supply while demand for hoarding increases, causing large fluctuations and prices to rise rapidly.

Although the Government has issued Decree 232/2025/ND-CP, officially ending the monopoly mechanism in the production of gold bars, export and import of raw gold, the market is still reacting mainly based on psychology and expectations.

Don't buy gold "surfing"

According to Mr. Nguyen Quang Huy, Executive Director of the Faculty of Finance and Banking, Nguyen Trai University, the abolition of the monopoly and allowing commercial banks to participate in the production of gold bars has strategic significance, contributing to creating competition, diversifying supply sources and moving towards a more stable market. “However, these impacts are not immediately evident in the short term,” Mr. Huy said.

Licensing, building production lines, organizing supervision, and especially building social trust require a certain amount of time. Therefore, during this period, the market psychology of “gold is rare – the price will increase” still dominates people and investors, causing gold prices to continue to climb and the buying-selling gap to widen.

Mr. Huy added that plain gold rings are a familiar investment channel for many people thanks to their ability to retain value and ease of trading. In the context of difficulty in accessing gold bars, the trend of buying gold rings is even stronger, contributing to the rapid increase in gold prices in recent sessions.

Currently, the price of gold rings is listed by SJC at 129.1 - 130.6 million VND/tael (buy - sell). The price of gold rings is listed by Doji at 125.5 - 128.5 million VND/tael.

The rapid increase in gold prices in a short period of time poses risks to investors who buy at high prices. The buying and selling gap is widening, which can cause buyers to lose money right after the transaction. In addition, domestic gold prices are currently more volatile than international prices, so if the international market has a correction, the risk of a price drop in the country is even greater.

Experts say that instead of following the mentality of “prices will continue to increase”, investors should carefully consider their goals and financial capabilities, and should only allocate a reasonable portion to gold for long-term accumulation. In the short term, caution should be exercised when buying gold for “surfing”, because strong fluctuations can bring profits but can also easily lead to heavy losses.

Gold rings are popular among people (Illustration photo: Huy Phuong/VOV.VN)

Why is the price of gold climbing?

Gold prices are also on the rise globally, buoyed by central bank buying and strong investment demand. According to Metals Focus, central banks’ annual net gold purchases have exceeded 1,000 tonnes since 2022. Central banks are forecast to buy 900 tonnes this year – double the annual average of 457 tonnes from 2016 to 2021.

The World Gold Council (WGC) said that investment demand for gold bars increased by 10% in 2024, while the amount of gold coins decreased by 31%, and this trend has continued into this year.

Gold futures prices surged to a record high on demand from central banks and expectations of interest rate cuts. (Illustration photo: KT)

According to information on Kitco News, gold futures (gold price for December delivery) had an impressive trading session when they jumped $83.40, setting a new all-time record high of $3,602.40/ounce in the trading session on September 3 (Vietnam time). This remarkable price increase shows the continuation of a broader uptrend, with gold futures prices rising continuously in the last 6 trading sessions.

Gold’s rally has been driven by shifting policy expectations from the US Federal Reserve. Market participants are increasingly confident that the central bank will deliver a 25 basis point rate cut this month, with current prices reflecting a 91.7% probability of such a move.

The growing confidence in interest rate cuts helps explain the unusual phenomenon of gold and the US dollar rising together. While a stronger greenback typically puts pressure on gold, the prospect of lower interest rates reduces the opportunity cost of holding non-yielding assets such as gold.

Additionally, interest rate cuts often signal economic uncertainty or policy easing, both of which tend to increase gold's appeal as a safe-haven asset, according to analysis on Kitco News.

Source vov.vn

Source: https://baophutho.vn/vi-sao-gia-vang-trong-nuoc-va-the-gioi-dong-loat-leo-thang-239035.htm