The price of SJC gold bars increased to a new peak of VND82.5 million/tael in the session of March 12, although the world gold price decreased slightly. Many forecast that the international gold price will adjust after the hot increase. However, investors still bet on this commodity. On March 12, the price of SJC gold bars reached a historical peak of VND82.5 million/tael in the morning, then fluctuated continuously, down to VND82.3 million, but at the end of the session, it still returned to its historical peak.
At many stores, many people are selling gold to make a profit, fearing that the price of this commodity may drop in the context of the world gold price also showing signs of adjustment. The State Bank of Vietnam (SBV) may introduce measures to stabilize this market, after having taken action to stabilize the USD/VND exchange rate in the session of March 11-12, with a total withdrawal of nearly 30,000 billion VND.
>> Nearing the Year of the Dragon, the price of gold rings peaked at 66 million VND/tael
The central exchange rate, USD/VND exchange rate in the banking system and in the free market decreased slightly in the session of March 12, thereby negatively affecting gold prices.
In fact, SJC gold bars still climbed to a record high. The price of gold rings is also around the historical peak, over 71 million VND/tael.
Since the beginning of the year, the price of SJC gold bars has increased by about VND9 million per tael, equivalent to about VND12%. Meanwhile, gold rings have also increased at a similar rate, with an absolute increase of more than VND7 million per tael.
Domestic gold prices have continuously set new peaks like many digital currencies, including Bitcoin. World gold prices showed signs of cooling down in the session of March 12 in the Asian and European markets after several sessions of intense increases, adding hundreds of USD/ounce before.
As of 6 p.m. on March 12 (Vietnam time), the spot gold price on the international market fell to $2,175/ounce after reaching $2,195/ounce on March 8. Some forecast that the world gold price may decrease by $100 to $2,080/ounce before increasing again. However, the adjustment of the international gold price is quite slow.
Not only that, there are some signs that the gold price increase may continue.
World gold prices are still expected to increase despite being under pressure to sell to take profits after a strong increase.
Gold futures rose to an all-time high above $2,200 an ounce, fueled by unprecedented speculative demand from hedge funds, according to the latest data from the US Commodity Futures Trading Commission (CFTC).
Money managers increased their speculative long positions in Comex gold futures contracts by 41,221 contracts to 145,106 contracts in the week ended March 5, while their short positions decreased by 12,389 contracts to 35,343 contracts, according to a report from the CFTC.
Thus, in the gold market, the number of net buying contracts reached 109,763, an increase of 95% compared to the previous week.
The total value of hedge funds’ bullish bets on gold is the largest in history. The net position (long minus short) is the second largest in history, behind only the short-selling buyback in early June 2019.
A record $11.3 billion flowed into the gold market as prices rose above $2,050 an ounce, according to commodity analysts at Société Général.
The previous strongest wave of capital inflow into the gold market was in 2019 with 9.1 billion USD.
It can be seen that the breakthrough of gold price in the international market surprised many people but was predicted a long time ago.
On Kitco, Nicky Shiels, chief strategist at MKS PAMPs, said that the rally has come sooner than most analysts expected. The breakout with increasing buying pressure in this wave is very different from previous ones.
Now, the question is, how much upside momentum does gold have left?
Late last week, analysts at TD Securities said they exited their long gold positions as the market could face higher volatility even as the uptrend remains intact.
According to TD Securities, gold holdings are still maintained and gold buying activity in Shanghai (China) has increased significantly in recent weeks. This could help gold holders earn more profits. However, it also depends on macroeconomic developments.
The US Federal Reserve (Fed) has recently signaled a more dovish stance on monetary policy. This has weakened the USD. Many people have had to buy gold to pay for short-selling contracts, causing gold prices to rise further.
Ole Hansen, chief commodity strategist at Saxo Bank, said that while he is bullish on gold, investors should be sensitive to the current speculative positioning in the market, noting that such speculative traders can reverse their positions very quickly if the market starts to turn.
Overall, many experts still bet on the possibility that gold has many prospects for further increases.
In a recent hearing, Fed Chairman Jerome Powell made statements hinting at the possibility of a rate cut. In addition, the US February jobs report showed that the unemployment rate increased and wage growth slowed. This also reinforced expectations that the Fed would cut interest rates and put pressure on the USD.
Source: Investing
