On Monday afternoon, gold prices in Vietnam witnessed a minor recovery following a more than 1% decline earlier in the session. After a challenging morning period, the Saigon Jewelry Company reported a 0.55% rise in their gold bar price, bringing it to VND184.1 million (US$6,965.01) per tael and reducing the day’s losses to 0.49%. For reference, a tael is equivalent to 37.5 grams or 1.2 ounces.
Despite the global price for gold, the cost of the precious metal in Vietnam remains significantly higher. In particular, local bullion prices exceed the global rates by more than VND21 million per tael.
The price of gold rings also rebounded on Monday, returning to VND183.8 million per tael, marking a 0.49% decrease for the day.
Global Gold Market Conditions
Internationally, spot gold fell 1.3% to $5,104 per ounce after a more than 2% decrease earlier in the session. This shift comes as geopolitical tensions in Iran escalate, resulting in a squeeze on world energy supplies. These circumstances also caused a boost in the dollar and a dampening in expectations for interest-rate cuts.
The dollar is currently near a three-month high, which makes bullion more expensive for those dealing in other currencies. Inflation fears fueled by oil prices and expectations of delayed rate cuts likely strengthened U.S. yields and the dollar. This scenario outweighed the demand for safe-haven assets, pushing the price of gold downwards.
However, gold prices have still risen approximately 18% this year, despite choppy trading conditions and stalled upward momentum.
Christopher Wong, an OCBC strategist, commented on the situation. He noted that during periods of high geopolitical market stress, investors often sell assets like gold to raise cash. However, once this phase passes, the uncertainty usually continues to underpin demand for safe havens such as gold.
Questions & Answers
What was the gold price situation in Vietnam on Monday?
On Monday, gold prices in Vietnam partially recovered following a more than 1% decrease earlier in the day. By the afternoon, the Saigon Jewelry Company’s gold bar price had risen 0.55%, taking it to VND184.1 million (US$6,965.01) per tael and reducing the day’s losses to 0.49%.
What is the difference between local bullion prices and global rates in Vietnam?
Despite global prices for gold, the cost in Vietnam remains significantly higher. More specifically, local bullion prices are more than VND21 million per tael higher than the global rates.
What factors contributed to the global decrease in gold prices?
The global decrease in gold prices was largely due to escalating geopolitical tensions in Iran, which resulted in a squeeze on world energy supplies, a stronger dollar, and lessened expectations for interest-rate cuts. This shift pushed the price of gold downwards, despite it being a safe-haven asset.
