2018, opportunities for gold investors?

According to expert Phan Dung Khanh, Investment Consulting Director of MayBank KimEng Securities JSC, the world's cash flow is currently shifting back and forth through several channels such as securities (stocks, bonds), real estate, foreign exchange and gold. Of which, gold is the best cash flow channel since the beginning of 2018. Accordingly, the gold price will tend to increase.

According to expert Khanh, this possibility will continue throughout the year because the world gold price has been "silent" for the past 7 years, while US and world stocks have been rising continuously for 8 years. This is likely a positive signal to support the gold market.

According to experts in the financial market, this year the price of gold will tend to increase.

Accordingly, the possibility of world gold prices rising after Tet is high. If this possibility occurs, expert Khanh believes that the 10th day of the first lunar month – the day of the God of Wealth – will be a lucky day for those who buy gold at this time.

Because normally, people who bought gold on God of Wealth Day 7 years ago all lost money because of high gold prices due to high demand. But this year can be considered the first year buying gold will be profitable because the gold price will continue to increase even higher.

Currently, the strongest resistance level of gold is 1,350 USD/ounce to 1,500 USD/ounce. If gold increases, it will likely surpass the historical threshold of 1,921 USD/ounce.

Another reason for the gold price to rise is that investors are withdrawing money from Bitcoin when this currency tends to fall. Bitcoin is known as gold version 2, so now, in the event that Bitcoin falls, these assets are proven to be virtual assets and investors will return to real value. Because Bitcoin assets are not as tangible as real gold anyway.

In fact, on February 16, gold skyrocketed after having increased for three consecutive sessions before and is currently showing no signs of stopping. Accordingly, the price of gold for April delivery on the Comex New York floor stood at $1,357/ounce.

Currently, the price of gold is 17.6% higher (+203 USD/ounce) than at the beginning of 2017. World gold converted to USD bank price is 37.5 million VND/tael, excluding tax and fees, 360,000 VND higher than domestic gold.

According to experts, the decline in the US economy and the USD is the main reason for the rapid increase in gold prices in the last session. US statistics show that the consumer price index in January 2018 of the world's number 1 economy increased by 0.5%, much higher than the 0.3% forecast by experts. This is the strongest increase in 5 months and is quite a surprising number.

Gold prices are currently 17.6% higher (+203 USD/ounce) than at the beginning of 2017.

In theory, rising inflation is when policymakers will consider accelerating monetary tightening. Interest rates will be pushed up rapidly. However, at the present time, the US Federal Reserve (Fed) has not made any clearer moves on its plan to raise interest rates. This is the reason why the US currency has fallen.

With inflation rising as fast as in the first month of the year, many experts expect the Fed to have stronger interest rate hikes, such as 4 interest rate hikes in 2018, instead of the expected 3 hikes this year.

The Fed is expected to raise interest rates for the first time in 2018 next March. Each time interest rates increase, the precious metals market is under downward pressure. Gold is also under downward pressure as the peak gold consumption season is about to end. However, in reality, the USD is still quite weak and this is the basis for gold not to adjust downward.

In addition, according to expert Khanh, if the stock market continues to decline after Tet, this will also put pressure on investors to switch to gold investment channels. Because normally, when stocks are weak, gold goes up.

In the Vietnamese market, the risk of real estate stocks falling sharply if the stock market goes down. The reason is that investors who make money from the stock market all pour money into buying real estate. Therefore, if the stock market goes down, it means that investors will not have the conditions to invest in houses and land, causing the real estate market to be gloomy. Thus, the price of real estate stocks will be affected and decrease accordingly.