Plunging due to "excitement" will immediately increase again Talking to VietNamNet reporters about the story of the gold price plummeting after Mr. Donald Trump was re-elected as US President, economic expert Tran Duy Phuong said: "The price decrease is only temporary, there is nothing surprising". Because, the decline in world gold prices when the US presidential election results are out "has become a habit". He emphasized that consecutive US presidential elections over the past 20 years have all developed like that. A few months before the election, the world gold price maintained a slight increase, this year it increased more strongly. When the election results were out, the gold price immediately decreased. The period of gold price decline usually lasts 1-2 months, with the total decrease in gold price after each previous election fluctuating between 100-250 USD/ounce. "When the US presidential election results are announced, during the power transition period, gold investors will take profits," said Mr. Phuong. After that, they will consider whether the new president's policy direction is beneficial or detrimental to gold. This is the reason why world gold prices repeatedly plummet after elections.

Gold prices plummeted after the US presidential election results. Photo: Minh Hien

Because the world gold price has increased quite strongly this year, he predicts that this time it will likely fall below the threshold of 2,600 USD/ounce. In the medium and long term, gold prices will certainly increase. Expert Tran Duy Phuong believes that under Donald Trump's presidency, gold prices will increase dramatically because his policies have brought many supportive factors for precious metals. For example, during the period of March-April this year, Mr. Donald Trump constantly talked about the need for the Fed to cut interest rates, even declaring: "If I win the election, I will not reappoint Fed Chairman Jerome Powell". From there, it can be affirmed that the period of Mr. Donald Trump is the era of a weak USD. Along with that, Mr. Donald Trump also often imposes taxes on goods from other countries, so there will be mutual retaliation and a possible trade war. This will also support the increase in gold prices. However, after this sharp correction, the gold price may increase to 2,900 USD/ounce but it will be difficult to surpass the threshold of 3,000 USD/ounce. Professor Dinh Trong Thinh acknowledged that the current decrease in gold prices was "excited" when Mr. Donald Trump declared victory in the US presidential election, but it is very difficult to decrease to the threshold of 2,300-2,400 USD/ounce. He affirmed that the gold price will bounce back. Because Mr. Donald Trump always focuses on economic development, often calling for interest rate cuts. In fact, recently, the gold price has increased due to the weakening of the USD and the Fed's interest rate cut, pushing the gold price "up". Economic expert Dinh Tuan Minh also said that in the long term, the trend of the gold market depends on many other factors that affect and control it. That is, the price of this precious metal will depend on the practical policies when Mr. Donald Trump becomes the US president. In addition, the increase or decrease in gold prices also depends on the movements of other countries, as well as on the world economy. The unstable effect occurs at gold shops . Just yesterday, November 7, big gold brands such as SJC sold out massively, without limiting the quantity on the day the gold price plummeted, according to expert Tran Duy Phuong, because many people went to sell gold, few people went to buy. "Today, out of 10 people who came to the gold shop, 9 went to sell, causing a very large supply market, a lot of gold was left behind. Even gold shops did not have enough money to pay. Many gold shops made appointments for customers to sell today, and come back in 2-3 days to get the money," he said.

Many people sold gold on the day the price of gold "fell freely". Photo: Tien Anh

For example, at Saigon Jewelry Company (SJC) in Ho Chi Minh City, on November 7, many people came to sell gold. Therefore, the gold price was adjusted many times. In the early morning, the buying and selling prices were at 85-87.5 million VND/tael, and by the end of the afternoon, they had been adjusted down to 81-85.5 VND/tael for buying and selling. The widening range of gold buying and selling prices shows that the market is unstable. "Those who go to sell today are in two cases: selling to make a profit at all costs and selling to cut losses," he emphasized. Accordingly, most of the gold holders have the mentality that the gold price is falling, afraid of losing all profits, so they quickly sell gold; while those who "hit the peak" of 89-90 million VND/tael are afraid that the price will collapse to more than 70 million VND, so they also quickly sell to "cut losses". Therefore, a one-way situation occurs, people only go to sell, creating an unstable effect of scarce money and stagnant gold supply. "Our people are often led by the crowd mentality. When the price is high, we see many people buying, we also buy and vice versa," this expert pointed out. At this time, he said, everyone should be calm, if not really necessary, wait for the price to recover and then sell gold. Because, at the time when people are rushing to sell gold, the price will certainly not be good. Especially, for those who bought recently, selling gold now will be a loss, or the profit margin is not much. "Remember that gold always increases in price over time. The decrease in gold price today is only temporary, maybe next month or after Tet the price will increase. Avoid buying and selling according to the trend," Mr. Phuong emphasized once again. For those who want to buy gold, the expert noted that they can consider buying now or waiting for a better price in 1-2 weeks. Because gold prices always have alternating increases and decreases, but the long-term trend is up.
In a report sent to National Assembly deputies on a number of issues related to the group of questions raised at the 8th session, State Bank Governor Nguyen Thi Hong said that the gold market has not been truly stable and sustainable, and is still affected by psychological factors, expectations, and potential risks affecting the currency and foreign exchange markets. In the coming time, Ms. Hong said that she will continue to implement many solutions. In particular, to continue implementing the Prime Minister's instructions, based on the intervention situation in the past time, based on current legal regulations, the State Bank will consider intervening in the gold market (if necessary) with appropriate volume and frequency to stabilize the market and monetary policy goals. Along with that, coordinate with ministries and branches to deploy inspections and checks on the activities of gold trading enterprises, stores, distributors and gold bar buyers and sellers...

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