Breaking the rules, gold prices continuously reach new peaks

Domestic and international gold prices continued to be volatile in the first session of the new week. Domestically, on the morning of October 21, the price of SJC gold bars was simultaneously adjusted by SJC Company and 4 commercial banks to increase by 2 million VND/tael, to 86 million VND for buying and 88 million VND/tael (selling).

This morning, for the first time, gold rings surpassed the 86 million VND/tael mark. By noon, Doji brand gold rings had increased to 86.65 million VND/tael (sold).

In the world , the spot gold price on the morning of October 21 also set a new historical peak, at 2,733 USD/ounce (84.4 million VND/tael), after surpassing the threshold of 2,700 USD/ounce for the first time last week.

Thus, since the beginning of the year, the world gold price has increased by nearly 32.5%, SJC gold bars increased by 19%, while the price of gold rings increased by 37.5%.

Gold prices in the world and in Vietnam have increased sharply despite the USD still increasing slightly. The DXY index - measuring the greenback's fluctuations compared to 6 other major currencies - increased this morning to above 103.5 points, compared to 100.7 points in mid-September.

Money continues to flow into gold, even as it seeks refuge in the US dollar. Typically, commodities, including gold, fall in price when the US dollar strengthens. This pattern has been broken in recent weeks.

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World gold prices continuously hit new peaks, SJC gold bars reached 88 million, gold rings set a record of 86.65 million VND/tael. Photo: HH

Is it about to crash?

A stronger US dollar but gold prices continue to rise and continuously reach new historical peaks. So what factors prevent investors from being afraid of “burning their hands” when pouring money into gold when the price has increased so much? Is gold about to plummet?

In fact, there are many factors supporting the price of gold. It is a world full of instability, from politics to economics. While input prices have been escalating in recent years, production chains have been broken in many places... many relations between countries, bilaterally and multilaterally, have deteriorated.

Geopolitical tensions are escalating rapidly in many parts of the world such as the Middle East, Ukraine and the Korean peninsula. Investors do not see an end to these tensions.

The Middle East is becoming a giant cauldron of fire as Israel opens many fronts and shows signs of wanting to suppress to create stability in the region. Most recently, a secret document of the US intelligence was leaked, which talked about Israel's attack plan on Iran after Tehran launched nearly 200 ballistic missiles at Israeli territory on October 1 and the drone attack on the private home of Israeli Prime Minister Benjamin Netanyahu on October 19.

In Ukraine, Russia is advancing into Donbass at its fastest pace since March 2022. Both sides are constantly attacking each other with large numbers of suicide drones. Western media reports say the US may agree to let NATO invite Ukraine to join if Kamala Harris wins the election.

The situation in North Korea is also very tense after the North Korean constitution called South Korea a "hostile state" and warned that the UN Secretary-General could be held responsible for escalating tensions on the Korean peninsula.

However, recently, there have been many predictions that gold could fall sharply, to the threshold of 2,500 USD. Observers believe that if Mr. Donald Trump wins the election, conflicts in the Middle East, Ukraine, and North Korea will cool down.

So far, there has been no specific plan or solution mentioned by Mr. Trump, but with the personal relationships the former US president has established with Mr. Putin or Kim Jong-un, many people believe in the possibility of resolving tensions at these hot spots.

According to a new poll by The Hill, for the first time, Mr. Trump has a higher chance of winning than Ms. Kamala Harris.

Easing geopolitical tensions will certainly reduce the flow of money seeking refuge in gold. However, that does not mean that gold will easily go down.

There may be adjustments, but the world economy is in an extremely difficult period because of declining growth, high inflation but countries are still pumping money.

On October 17, the European Central Bank (ECB) cut interest rates for the third time since the beginning of the year. Previously, on October 16, Thailand unexpectedly lowered interest rates for the first time in more than 4 years. China also continuously pumped money,... Mr. Trump is also expected to step up economic stimulus.

When the world is pumping money, gold can still be a good choice. However, a high dollar will put pressure on gold. The rate of interest rate reduction in many countries is faster than the US. Mr. Trump also does not want the dollar to weaken too much.

Moreover, with the recent sharp increase, gold has lost its luster for investors. Even though many forecasts say that gold will reach $3,000/ounce in the first half of next year, equivalent to a 10% increase.

'High risk, high reward', gold price soars to new peak then enters recession? Gold price has increased sharply in recent sessions, breaking the historical peak of 2,685 USD/ounce due to unpredictable developments in the world. But is the precious metal about to enter a recession?