Speculative money will leave the gold market

Discussing the development of the gold market in 2025, in a paper submitted to the workshop "Investment opportunities in the new context" of the Investor magazine held on March 19, Associate Professor, Dr. Tran Viet Dung and the macro research team of the Banking Science Research Institute (Banking Academy), emphasized that gold is a special commodity, always having a strong attraction for all social classes.

Accordingly, in 2025, gold prices will continue to be affected by domestic and international factors.

The group of experts pointed out that international gold prices continue to affect domestic gold prices through import activities. According to the forecast of the World Gold Council, world gold prices are likely to maintain their upward momentum in 2025, but at a slower pace than in 2024.

gold price.jpg
People lined up to buy gold on the day the price skyrocketed to 100 million VND/tael. Photo: Thach Thao

In addition, the USD also significantly affects domestic gold prices through international gold prices and gold import costs. In the context of a slow global economic recovery and the forecast that the US Federal Reserve (Fed) will continue to cut interest rates in 2025, the USD may weaken. This will put pressure on increasing international gold prices.

On the contrary, the depreciation of the USD pulls down the USD/VND exchange rate, thereby reducing the cost of gold imports and affecting the domestic gold price in a downward direction.

However, the State Bank of Vietnam's exchange rate management policy continues to play a key role in controlling exchange rate fluctuations, thereby controlling gold prices, the group of experts pointed out.

Vietnam’s monetary policy, including interest rates and money supply, also affects the ability to invest in gold domestically. Specifically, low interest rates can encourage people to shift capital flows from savings to assets such as gold and real estate.

However, in 2025, with the economic recovery and interest rates at their lowest level in many years, it is predicted that deposit interest rates will increase slightly to attract capital from the people, creating a basis for increasing lending capital. When interest rates increase, it will contribute to pulling speculative capital out of the gold market.

At the same time, gold market management policies such as tightening imports, controlling the difference between domestic and international gold prices... also reduce speculation and stabilize the domestic gold market.

W-golden ear.png
Experts say gold prices will depend on global geopolitical factors. Photo: Tam An

Not to mention, many forecasts show that in 2025, the Vietnamese stock market will flourish thanks to expectations of market upgrade (VPBankS Research, 2024). The real estate market is also entering a new growth cycle, supported by new legal corridors and improved homebuyer sentiment. These factors will affect gold prices in a downward trend.

Gold price will drop to 72-80 million VND/tael?

Regarding the gold price in 2025, Associate Professor, Dr. Tran Viet Dung and the macro research team of the Banking Science Research Institute proposed 3 scenarios.

In the base scenario, gold price will fluctuate from 81-87 million VND/tael.

With a strong increase scenario, the research team predicts that domestic gold prices could increase to VND88-92 million/tael by the end of 2025 and peak occasions.

However, in reality, in recent days, domestic gold prices have been fluctuating violently following world prices. By the afternoon of March 19, SJC gold bars were approaching the threshold of 100 million VND/tael, while plain gold rings soared to a new peak of 100.4 million VND/tael, breaking previous records.

At this threshold, gold prices also far exceeded the forecast levels in the base scenario and the strong bullish scenario above of the research team.

Notably, in addition to the two increasing scenarios, Associate Professor Dr. Tran Viet Dung and the research team also pointed out a number of factors that could cause domestic gold prices to decrease.

Specifically, the world gold price may fall to 2,500-2,600 USD/ounce due to the rapid recovery of major economies and central banks prioritizing tight monetary policies; the USD appreciates strongly; domestic interest rates increase more than expected, pulling cash flow back to bank savings channels and reducing demand for gold investment.

Accordingly, in this scenario, domestic gold prices could fall to 72-80 million VND/tael; there is a possibility of further decline when domestic demand for storage and investment decreases sharply.

In the medium and long term, Associate Professor Dr. Tran Viet Dung believes that the room for gold price growth will continue to be supported by loose monetary policy and increasing geopolitical instability globally. In addition, the continued increase in gold demand from major central banks in the world in recent years is also a positive factor for gold prices.

Running from home to the store, the price of gold skyrocketed by 400,000 VND/tael . The price of gold on the afternoon of March 19 reached 100 million VND/tael, and the scene of people lining up to buy and sell took place again. A female customer saw the price skyrocket by 400,000 VND/tael during the time she traveled from home to the gold store.