The price of gold in Vietnam continued to decline on Monday, with reductions seen throughout the day following an initial drop of nearly 1% earlier in the day. Saigon Jewelry Company, a prominent gold retailer, noted a further 0.42% decrease in its gold bar price from the morning, ultimately tallying a total loss of 1.37% for the day. The quoted price of gold per tael (equivalent to 37.5 grams or 1.2 ounces) fell to VND165.2 million, equivalent to US$6,276.26.
In comparison, local gold prices in Vietnam exceed international gold rates by approximately VND17 million per tael. The price of a gold ring also saw a similar decrease, falling to VND164.7 million per tael.
Internationally, gold prices fell by 1% on Monday in response to escalating geopolitical tensions. The refusal of President Donald Trump to accept Iran’s recent peace proposal to end ongoing conflicts in the Middle East has raised fears of inflation and a continued period of high interest rates. This sentiment has been reflected in the gold market, with spot gold falling to $4,667.99 per ounce following a 2% increase last week. Concurrently, U.S. gold futures for June delivery saw a drop of 1.1%, hitting $4,677.80.
Market observers note the significant impact of these geopolitical developments on inflation risks and market expectations. Bybit’s Chief Market Analyst, Han Tan, highlighted that the stalled peace negotiations have weighed heavily on the market’s psyche, maintaining high interest rate expectations and amplifying pressure on non-yielding gold. Since the conflict’s inception in late February, gold has seen a decline of more than 11%.
Tan further suggested that gold could face additional downward pressure if the U.S. Consumer Price Index (CPI) forecast for the following day proves hotter than anticipated. This situation could necessitate the Federal Reserve maintaining elevated benchmark rates for an extended duration.
Why did Vietnam’s gold prices drop on Monday?
The gold prices in Vietnam dropped due to international gold prices falling by 1% in response to increasing geopolitical tensions and the current conflict in the Middle East.
What are the implications of high inflation and interest rates on the gold market?
High inflation and interest rates put pressure on non-yielding bullion, causing its price to drop. The gold market has seen a decline of more than 11% since the conflict began in late February.
What could cause further downward pressure on gold prices?
If the U.S. Consumer Price Index forecast proves hotter than anticipated, the Federal Reserve may need to maintain elevated benchmark rates for a longer period. This scenario could exert additional downward pressure on gold prices.
