The world gold price has ended its weekly increase, with a decrease of 78.2 USD/ounce compared to the closing price of the previous week. However, experts still believe that this is a normal adjustment and gold is still in a long-term price increase cycle.
The global gold market witnessed many fluctuations this week. Entering the trading week, the world's yellow metal price skyrocketed to a new record high, thanks to the boost from safe-haven demand amid concerns about US President Donald Trump's tax plan. However, profit-taking pressure pushed the price of this precious metal to nearly the threshold of 2,900 USD/ounce.
While the market lacked data to act as a catalyst, the recovery of the US dollar continued to put pressure on gold and pushed the price away from the threshold of 2,900 USD/ounce on February 27. The decline of gold continued in the final trading session of the week when the report released during the day showed that inflation increased as expected by the market. At the end of the week, Spot gold prices were anchored at $2,858.1 an ounce, down $78.2 from last week's close, marking the worst week in more than three months.
Gold's eight-week winning streak ended as the precious metal posted its biggest loss since the week of the US election.
Despite the sharp drop in gold prices, many analysts said the move was not surprising, as the precious metal was technically overbought as investors tried to push prices to $3,000 an ounce.
Saxo Bank’s head of commodity strategy Ole Hansen described this week’s price action as an overdue correction, adding that gold could test support at around $2,800 an ounce.
“Overall, we see this as a healthy correction before a new rally to $3,000/oz and beyond for gold,” said Hansen.
“This is a normal pullback and I’m not worried,” said Jess Colombo, an independent precious metals analyst and founder of the BubbleBubble Report. “Gold could pull back and retest support at $2,800 an ounce, the high in late October.”
Colombo noted that it is difficult to be completely bearish on gold as inflationary pressures continue to mount and the US economy continues to weaken.
The Atlanta Federal Reserve Bank recently released its latest gross domestic product forecast, predicting that the US economy will shrink by 1.5% in the first quarter of this year.
Analysts also noted that gold will continue to be well supported as a safe-haven asset as the US government announced it would impose a 25% tariff on imports from Canada and Mexico and a 10% tariff on China starting March 4. The move is expected to spark a trade war as Canada and Mexico prepare to respond with their own tariffs.
OANDA senior market analyst Kelvin Wong expects gold to maintain a solid long-term uptrend even if prices correct in the short term, adding that the key support level he is watching is $2,716 an ounce.
“A daily close below this level would likely trigger a deeper correction that could last for months,” Wong said. However, he added that any deterioration in economic data would support gold’s safe-haven appeal.
Next week, markets will focus on February's non-farm payrolls data, along with data on service sector and manufacturing activity. The event that is expected to have a broader impact on gold is the European Central Bank's monetary policy decision. The ECB is expected to cut interest rates again next week, which could provide some support to the dollar and create headwinds for gold.
Meanwhile, domestic gold prices were more stable than in recent trading weeks. Entering the new week, both gold bar and gold ring prices increased slightly. On February 26, the price of this precious metal turned down, with the highest decrease being VND900,000. The decline in gold continued in the following days. On March 1, gold bar prices remained at VND88.5 million/tael for buying and VND90.5 million/tael for selling. Gold ring prices of most brands remained around VND90 million/tael for buying and VND91 million/tael for selling.
At 3:00 p.m. on March 1, the selling price of SJC gold bars was fixed at VND90.5 million/tael. Currently, if converted according to Vietcombank exchange rate (excluding taxes and fees), the difference between domestic and world gold prices is about VND1.9 million/tael.
Source: https://baolangson.vn/gia-vang-tuan-toi-ket-thuc-chuoi-8-tuan-tang-gia-5039503.html
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