On Monday, the price of gold in Vietnam experienced a decline, mirroring a drop in global bullion rates. This downward trend was seen when the Saigon Jewelry Company lowered the price of its gold bars by 0.8%, or to VND173.1 million (US$6,571.64) per tael. This adjustment has prompted other sellers to revise their rates in alignment. Currently, local bullion prices are approximately VND25 million per tael higher than international rates.
The price of gold rings also decreased, sliding to VND172.9 million per tael. It should be noted that a tael is approximately 37.5 grams or 1.2 ounces.
On a global scale, gold prices also fell on Monday. This decrease was influenced by a stronger dollar, the continued impact of the Iran war on oil prices, and stronger-than-expected U.S. jobs data. These factors lowered expectations for interest rate cuts by the Federal Reserve.
Spot gold reduced by 0.9%, falling to $4,631.69 per ounce. Additionally, U.S. gold futures for April delivery saw a loss of 0.5%, dropping to $4,657.50 per ounce. This trading activity took place in thin liquidity conditions, with many markets in Asia and Europe closed for a holiday.
“The latest robust NFP (nonfarm payrolls) print has reinforced hawkish central bank nerves. In addition, the ongoing fear of inflation driven by high oil prices continues to overshadow gold’s traditional role as a safe haven,” stated Tim Waterer, chief market analyst at KCM Trade.
Historically, gold has been considered a protection against inflation. However, increased interest rates tend to reduce demand for this non-yielding asset.
What factors contributed to the fall in gold prices?
The decline in gold prices was influenced by a stronger dollar, the ongoing Iran war’s effect on oil prices, and stronger-than-expected U.S. jobs data. These factors reduced expectations for interest rate cuts by the Federal Reserve.
How did the price change affect the trading of gold?
The decrease in gold prices led to a reduction in the trading of spot gold and U.S. gold futures for April delivery. Both saw declines in their respective rates.
What is the traditional role of gold in the economy?
Traditionally, gold is seen as a hedge against inflation. However, in situations of elevated interest rates, the demand for this non-yielding asset tends to decrease.
