Gold is about to be sold off or skyrocket to hundreds of millions of dong/tael?

giavangminhhien20 ok.gif — *SJC gold price increased sharply*

The drop is worrying

During the week of April 19-26, the world gold market recorded a sharp decline. After reaching a peak of 2,430 USD/ounce, the spot gold price plummeted to 2,300 USD/ounce, equivalent to a decrease of 130 USD per ounce (-5.3%).

Such a drop is quite sharp but still quite small compared to the increase of over 20% in the previous 2 months or nearly 34% in 6 months.

This is the factor that makes some experts believe that gold will continue to be sold off and may fall another 200-300 USD/ounce in a short time.

The easing of tensions in the Middle East has also led many to believe that gold prices will continue to fall.

On Kitco News, Chantell Schieven, Head of Research at Capitalight Research, said that gold is “overbought” and is currently in a correction phase. The recent decline is just the beginning.

Ms. Schieven predicts that gold prices are likely to fall back to the $2,150/ounce range, losing all the gains since March.

Previously, some experts also predicted that gold would adjust down sharply after the US Federal Reserve (Fed) delayed its decision to cut interest rates, reversing monetary policy from tight to loose.

Initially, the market believed that the Fed would postpone until the June meeting, but now the belief has shifted to September, even the morning of 2025. As of April 28, according to the signal from the FedWatch Tool of the CME exchange, only 56.3% believe that the Fed will cut interest rates at the meeting on September 18. There are 42.6% believing that the Fed will keep the interest rate at the current level of 5.25-5.5%/year.

Also as of April 28, only 11% believe the Fed will cut interest rates at its June 12 meeting, down from 70% on March 28. 88.9% believe the Fed will keep the current interest rate at 5.25-5.5%/year.

Many experts believe that, given the current situation, the Fed will not be in a hurry to lower interest rates soon. The USD as well as US bond yields will remain high.

The DXY index (measuring the greenback’s performance against six major currencies) stood at 106.09 points on April 27 in the US market, up from 104.1 points on April 10. The high USD may last until almost the end of the third quarter. Gold prices will continue to be under pressure.

Gold can go up to 300 million VND/tael

However, that is only in the short term. Most experts still predict that gold is in a long-term uptrend, possibly even reaching 10,000 USD/ounce (equivalent to 309 million VND/tael based on the exchange rate of 25,458 VND/USD at Vietcombank on April 27).

Gold is expected to continue to rise and for many years to come in the context of the world being in an extremely unpredictable situation. The world financial market is unusual and unprecedented.

Accordingly, a huge amount of money has been pumped out by countries over the past years, especially during the Covid-19 pandemic and post-pandemic period. Too much money has been pumped out, causing many types of assets to be suspected of falling into a bubble. The US economy is always on the brink of recession, but the stock market has been rising continuously and reaching new peaks.

Commodity prices increased abnormally, inflation increased at times to over 10% in the European region and over 9% in the US in mid-2022.

Money is even pouring into many virtual assets, including digital currencies. Bitcoin in mid-March set a historic record of 73,680 USD/BTC when money everywhere poured into Bitcoin ETFs.

The worrying thing is that despite the money being pumped out, many economies are still sluggish. Many economies are not absorbing the money. Production is said to be much slower than the amount of money being put into circulation.

In addition, geopolitical instability is increasing everywhere. This is a factor that is expected to push gold - a safe haven for investors around the world - to unpredictable heights in the coming years.

Ms. Schieven also raised her gold price target forecast for the end of 2023 from the previous forecast of $2,400 to $2,500/ounce.

The Fed will eventually have to cut interest rates this year, Schieven said, and the low summer gold prices could be a good time for long-term investors to buy.

Previously, Mr. Scott Minerd, CFO of New York-based financial services company Guggenheim Partners, said that gold prices could reach up to 5,000 USD/ounce, even 10,000 USD/ounce (equivalent to 309 million VND/tael).

Accordingly, a representative of Guggenheim Partners, a company that manages $270 billion, said that money will leave some types of assets, including digital currencies, and when people look for shelter against inflation, gold and silver will be the best place. Gold will enter a phase of exponential growth.

Previously, in mid-2021, on Kitco, Dan Oliver, founder of Myrmikan Capital, also said that the long-term forecast for gold is no longer $3,000/ounce, but the target is now $10,000/ounce.

According to Dan Oliver, the Fed is taking huge risks to prop up the US economy and gold will respond accordingly, rising to a price that can balance the Fed’s balance sheet. And so the number attached to the price of gold will change dramatically, which according to Dan Oliver will be $10,000/ounce when the Fed’s assets collapse.

Dan Oliver emphasized that once the Fed's assets such as mortgage-backed securities or treasury bonds... decrease in value, it will affect the USD, thereby positively affecting gold.

HA (according to Vietnamnet)

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