Vietnam Gold Market Enters Phase of Screening and Transparency
Dr. Nguyen Tuan Anh, lecturer in Finance at RMIT University Vietnam, assessed the current gold market situation and provided insights on its outlook until the end of the year.
The price of SJC gold has fluctuated sharply over the past week, with a buy-sell spread for gold bars remaining commonly at 4 million VND/ounce. Dr. Tuan Anh attributed this development to the unpredictable nature of the Federal Reserve's monetary policy, which is influencing gold prices along with the strength of the US dollar and safe-haven demand.
The Fed's July report showed that inflation remains above its 2% target, while economic activity continues to grow, leaving the possibility of maintaining a cautious monetary policy still present. This could support the US dollar and US bond yields, which is a negative factor for gold as it does not generate recurring cash flows.
According to Dr. Tuan Anh, domestic gold prices will be affected by the general trend but its extent depends on the USD/VND exchange rate, supply of physical gold, and government policies. A stronger USD could increase the cost of converting gold to Vietnamese dong, limiting the decrease in domestic prices.