After witnessing a 1.74% surge earlier in the session, the gold prices in Vietnam experienced a slight downturn on Wednesday afternoon. The price of the gold bar from the Saigon Jewelry Company decreased by 0.28% from its morning value, settling at VND175 million (US$6,646.04) per tael. Despite this dip, the daily gains were retained at 1.45%. Consequently, the difference between global and national gold rates diminished to VND22 million per tael.
Alongside the gold bars, gold ring prices also noted a slight reduction of 0.29%, closing at VND174.5 million per tael. However, this price still reflected a 1.45% increase from the previous day’s valuation. In Vietnam, a tael is a unit of weight measuring approximately 37.5 grams or 1.2 ounces.
On an international scale, gold prices experienced an upturn on Monday due to the recent agreement between the U.S. President and Iran on a two-week truce. This ceasefire is geared towards concluding negotiations to end the prevalent war, which has caused significant disruption in global markets.
As a result of this development, oil prices dipped below $100 a barrel, and the value of the dollar also declined. Such changes favor gold, which is priced in U.S. currency. Spot gold experienced a 2.5% increase, reaching $4,819.52 per ounce. During the session, the value of gold rose by over 3%, marking its highest level since March 19. Similarly, the U.S. gold futures for June delivery witnessed a 3.4% rise, reaching $4,845.30.
The announcement of the two-week truce disrupted expectations of escalation, which was a positive development for gold, according to Nicholas Frappell, Global Head of Institutional Markets at ABC Refinery. However, gold has seen an approximately 8% decrease since the conflict began in late February. This is because the allure of the non-yielding metal typically decreases in a high-interest-rate environment.
Nonetheless, prices have shown signs of recovery in recent days. This rebound is backed by optimism surrounding the ceasefire and the anticipation that slower global economic growth could offset predictions of stable or higher borrowing costs.
What caused the dip in Vietnam’s gold prices?
The gold prices in Vietnam dipped slightly due to a reduction in global gold prices.
What effect did the announcement of the U.S.-Iran truce have on gold prices?
The truce sparked optimism, causing gold prices to increase on a global scale as investors sought safe-haven assets.
How does the interest rate environment affect the appeal of gold?
In a high-interest-rate environment, the appeal of the non-yielding metal, such as gold, typically decreases as investors turn to assets with higher yields.
