Although it has not yet returned to the record level of nearly 2,800 USD/ounce as at the end of October, the price of gold last week reached a fairly high price when it nearly reached the 2,700 USD/ounce mark after a short period of price decrease.
Gold bars are stored in a facility in Germany.
Difficult to determine the peak
More specifically, according to CNBC, gold bullion has increased in price by more than 5.7% in a week. This increase rate is almost second only to the increase in March 2023 when the wave of banking crisis in the US shook the global market, causing investors to seek safe assets such as gold.
This time, the increase in gold prices comes from increased uncertainties. CNBC quoted Alex Ebkarian, CEO of Allegiance Gold - a financial consulting company in the US, explaining: "The escalation in the Ukraine conflict seems to be expanding. As the risk of war increases, the appeal of short-term safe havens increases." That is considered an important reason for the recent increase in gold prices.
Not only that, the fact that gold prices will continue to increase has become a consensus among most observers, investors and analysts. Recently, Goldman Sachs Financial Group (USA) predicted that gold prices will continue to increase in the near future and could set a new record of over 3,000 USD/ounce in 2025. Not only that, analysts also raised the issue that 3,000 USD/ounce may not be the record price of gold next year. Typically, Bloomberg cited some analysts saying that gold prices could reach 3,150 USD/ounce in the near future.
In terms of market supply and demand, one of the reasons why gold prices could rise is due to higher demand from central banks, accompanied by a cyclical increase when the US Federal Reserve (Fed) cuts interest rates.
Instability heats up gold prices
For now, the Fed is unlikely to cut rates again in December, so the gold rally may stall. "A pause in the Fed's December rate cut could halt the gold rally, but the loose monetary cycle, macroeconomic and geopolitical uncertainty, and healthy physical demand should keep gold sentiment positive," according to new analysis from ANZ Bank.
Economic and political instability can be considered the main impact that can cause gold prices to increase. First is the upcoming return of Donald Trump to the White House with the forecast of increasing the US-China trade war. Mr. Trump has not hesitated to affirm that he will increase the tax rate to 60% on imported goods from China. Not only that, many other countries that have large trade surpluses with the US can also be subject to Washington's tax increase during Mr. Trump's upcoming term. Therefore, Reuters quoted the opinions of representatives of financial consulting companies predicting that the proposed tax rate of US President-elect Donald Trump will lead to many fluctuations in the global market.
Tensions with the US also make China need to increase its reserves, but to limit its dependence on the USD, gold has become an option for Beijing. Not only China, but India and many other members of the BRICS bloc are aiming to increase trade in each other's currencies. That leads to the USD increasingly moving away from the reserve asset basket of member countries in the bloc. In fact, BRICS members, notably China and India, have maintained high gold purchases over the years.
Not only that, Western sanctions against some countries have made some central banks hesitant to hold USD reserves, so gold is even more popular.
In addition, although Mr. Trump declared that he would bring peace to the Gaza Strip as well as cool down the conflict between Israel and Hezbollah in Lebanon, that does not mean that the general situation in the Middle East will ease tensions. Mr. Trump's personnel selection in some important positions signals the possibility that the US will increase sanctions on Iran, most likely restricting Tehran's oil exports. This means that the risk of the energy market will increase in the near future. This is also an important factor that can lead to an increase in gold prices.
Source: https://thanhnien.vn/gia-vang-the-gioi-con-leo-thang-kho-luong-185241123210914243.htm
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