On Tuesday, Vietnam witnessed its lowest gold prices since the start of July, resulting from a decline in worldwide prices due to escalating tensions in the Middle East. The price of a gold bar from the Saigon Jewelry Company fell 0.88%, to VND147.1 million (equivalent to US$5,604.76) per tael. In Vietnam, a tael is a unit of weight equivalent to 37.5 grams or 1.2 ounces.
The price of gold rings also saw a decrease, falling by 0.54% to VND146 million per tael. The drop in gold prices this year has amounted to a 3.7% decrease overall.
On the worldwide stage, after experiencing a 3% drop on Monday, gold prices made a minor recovery. This was following an announcement by U.S. President Donald Trump that he was re-establishing a naval blockade on Iran. This action led to a rise in oil markets, renewed fears about inflation, and the potential for the longevity of higher U.S. interest rates. As a result, spot gold increased by 0.28% to $4,011.10 per ounce.
Market analyst at Forex.com, Fawad Razaqzada, commented on the situation, explaining that the rally in oil prices was a result of the conflict in the Middle East and suggested policy tightening by the Federal Reserve. He also noted that these developments spelled bad news for assets like gold, which yield no interest.
Razaqzada further speculated, “If oil prices continue to surge, gold prices might experience a downfall, potentially dropping to the $3,800 level initially. There is also a chance they could drop to $3,500 over time if the selling pressure intensifies.”
What caused the drop in Vietnam’s gold prices?
The decrease was primarily due to a dip in global gold prices, spurred by increased tensions in the Middle East.
How has the global gold market reacted to recent events?
After a 3% plunge on Monday, global gold prices have slightly recovered following the US President’s decision to reinstate a naval blockade on Iran.
What impact could rising oil prices have on the gold market?
According to market analysts, if oil prices continue to surge, gold prices could potentially drop significantly, possibly down to $3,500 over time if the selling pressure increases.
