A rare strong week

The world precious metals market recorded a rare week of strong growth, with gold prices increasing the most in over a year, up more than 5% and closing at nearly 2,717 USD/ounce (equivalent to more than 84.3 million VND/tael).

Compared to the bottom of the decline after Donald Trump was elected the 47th President of the United States, at 2,540 USD/ounce (recorded on November 14), the spot gold price on the international market has increased by nearly 7%. Converted to each tael of gold, it has increased by 5.5 million VND.

Domestically, SJC gold bars increased by 3.5-5 million VND/tael, from 80 million VND to 85 million VND (business buying price) and 83.5 million VND to 87 million VND (selling price). The price of gold rings increased by about 4.4 to 5.6 million VND/tael to about 85 million VND (buying price) and 86.5 million VND/tael (selling price).

Thus, compared to the peak of 2,789 USD/ounce reached on October 30 before Mr. Trump was elected, the price of gold is only 2.6% lower, meaning that it only needs to increase by half the week of November 18-22 for the precious metal to record a new record high.

Previously, in the first two weeks of November, the gold market witnessed a rare sell-off, with profit-taking pressure after the commodity had increased by 35% since the beginning of the year and bet on the possibility and reality of Mr. Trump winning the election, as well as his commitments to resolving geopolitical tensions in many regions of the world.

The resonance of short selling activities contributed to pushing the gold price down from 2,789 USD/ounce to 2,540 USD/ounce, equivalent to a decrease of 8.9%.

However, gold soon rebounded as predicted by many domestic and international experts.

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Domestic and international gold prices increase rapidly again. Photo: HH

Trump's statement is doubted, what will happen to gold price?

The question is why did the world and domestic gold prices suddenly increase so quickly? Investors reversed course and rushed to buy gold, in contrast to the sell-off just 2-3 weeks ago. Domestically, there were times when people rushed to sell gold for fear of further price drops, and then they were unable to buy.

Does the market no longer believe that Donald Trump can end the conflict in Ukraine within a day of taking office (on January 20) or/and cool down the war in the Middle East…?

In fact, most forecasts from experts from the world's leading organizations such as Goldman Sachs, JP Morgan, WGC... believe that gold is still in a long-term uptrend in price in the context of an increasingly uncertain world, increasing competition and conflict.

In addition, many forecasts suggest that the world will face a new inflation cycle, which may not be as severe as after the pandemic (with inflation rising to over 10% in Europe and 9.1% in the US by mid-2022), but is still very high.

The US, like many other countries, has just begun a cycle of interest rate cuts that could last for several years. Many countries have stepped up stimulus packages, pumping money directly and indirectly to support their economies, such as China, Japan, Thailand, etc. Commodity prices will escalate.

Some organizations such as Goldman Sachs maintain their forecast that gold prices will reach $3,000/ounce in 2025.

Recently, investor confidence in Donald Trump's ability to resolve geopolitical tensions in some regions seems to be waning.

Tensions in Ukraine in particular and Europe in general have been higher than ever after the outgoing Joe Biden administration recently allowed Ukraine to use long-range missiles made in the US to attack Russian territory. Ukraine then used US ATACMS missiles and recently British Storm Shadow missiles to launch attacks on some areas of Russia.

On the other hand, on November 21, Russia used the Oreshnik medium-range hypersonic missile (which is considered unstoppable, with a speed of 2.5-3 km/s, 10 times the speed of sound) to respond to Ukraine's deployment of long-range weapons from the US and UK, and as a warning signal that NATO "will have to pay the price".

In the Middle East, the situation remains heated. Israel continues its airstrikes in Lebanon. Israel confirmed that it recently attacked an Iranian nuclear facility, although it acknowledged that Iran’s path to producing nuclear weapons has not been blocked.

Investors seem to realize that it will be difficult for Mr. Trump to solve the difficult problem in a Middle East region that is complex in culture, politics, and religion, and it will also be difficult for him to quickly end the conflict in Ukraine, especially when tensions are being pushed up at the time of the power transition in the US.

However, experts are also waiting for Mr. Trump to solve the problem in the Middle East in a more reasonable way. Meanwhile, in Ukraine, investors are still waiting to see how the new White House owner will behave with Mr. Putin, Ukraine, NATO and European countries to achieve peace in Ukraine after more than 1,000 days of conflict.

Gold prices will fall if geopolitical tensions ease. Under Trump, many forecasts suggest that the US dollar will rise, putting pressure on gold. Inflation in the US and around the world could also be controlled if energy costs are reduced, and oil and gas prices fall sharply following Trump’s commitment to increase supply.

With mixed factors, gold is expected to be unpredictable, but with a tendency to increase more than decrease. However, the increase may not be much when the price of gold has increased sharply over the past year and the cash flow may be dispersed into stronger production activities in the US, into US stocks and partly into some other types of assets such as cryptocurrencies, including Bitcoin - a market strongly supported by Mr. Trump and billionaire Elon Musk. Bitcoin has more than doubled since the beginning of 2024 and is close to the threshold of 100,000 USD/BTC.

Gold prices skyrocketed, Bitcoin for the first time in history reached nearly 100,000 USD. Gold prices continued to soar and returned to an upward trend, the price of digital currency Bitcoin also for the first time in history reached nearly 100,000 USD due to the actions of US President-elect Donald Trump.