Gold price fluctuations first depend on world gold prices. Next is the domestic gold market management policy.
In the world, the actual price of gold shows no signs of going down, and is even close to its historical peak. By 11:20 a.m. on March 4, the spot price of gold was at 2,081 USD/ounce, only about 10 USD lower than its all-time peak.
World gold prices are currently under pressure from a number of factors, including the hesitation of the US Federal Reserve (Fed) in reversing monetary policy, from tightening to loosening, reducing regulatory interest rates. from a record peak of 22 years, at 5.25-5.5%/year.
Recently, many experts predict that the Fed will not reduce interest rates in the first half of 2024, and even the Fed “may not lower interest rates this year”. This immediately kept the USD high, thereby putting pressure on gold.
On AFR, Torsten Slok – chief economist at Apollo Global Management said that the Fed probably will not cut interest rates in 2024 because “the US economy is accelerating again and inflation remains persistently high”.
According to this expert, the Fed spent most of this year fighting inflation.
Previously, Fed Chairman Jerome Powell also affirmed that the Fed wanted more solid data about inflation moving towards the 2% target.
Thus, the possibility of the Fed reversing monetary policy is fading away, from expectations of reducing interest rates in March, to May, then June and now possibly to 2025. It makes the USD strong, and Gold is under selling pressure.
Reality also shows that many gold ETFs sell this commodity very strongly.
However, world gold prices are not decreasing, but are heading towards a new high record. Countries have still bought a lot of this commodity in recent months, after record net purchases in 2021, 2022 and 2023.
The need for storm shelter of cash flows is very large. Gold is still considered a top choice.
Moreover, in most forecasts, gold is at the foot of a rising price wave when the Fed is about to enter a long and strong interest rate reduction cycle. The USD will weaken and gold will increase strongly. Bright prospects keep gold prices going up even though many organizations record profits and take profits.
Some forecasts that gold could reach 2,200-2,400 USD/ounce in 2024, even 3,000 USD/ounce.
In a recent sharing, Mr. Le Quang Tri – Brokerage Director of Nhat Viet Securities Joint Stock Company – said that domestic gold prices will closely follow world gold prices, especially when authorities introduce measures. stabilize the market. However, many people still believe in gold in the long term and can buy when gold prices gradually decrease following the intervention measures of the State Bank.
Gold also depends on the USD/VND exchange rate. Recently, exchange rates have increased sharply in the banking and free markets. Dr. Nguyen Tri Hieu said that the exchange rate may tend to increase in the first half of the year, then cool down at the end of the year.
The USD/VND exchange rate may be more stable at the end of the year, but when the Fed lowers interest rates, world gold prices will increase rapidly. The general trend for the gold market is probably still quite bright in the second half of 2024 and in 2025, regardless of the circumstances.
