Why did the price of gold plummet?
In just the last five trading sessions, the price of gold has plummeted by more than 2 million VND per ounce, causing great concern among investors in this precious metal.
Kitco News, citing an analysis by Commerzbank, suggests that the recent plunge in gold prices is due to massive sell-offs. Currently, the world gold price is trading at $1,865.7 USD/oz. Converting this using the USD exchange rate at Vietcombank (1 USD = 23,280 VND), each ounce of world gold is equivalent to approximately 52.32 million VND, which is 2.88 million VND/ounce lower than the selling price of SJC gold.
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| In just 5 days, the price of gold worldwide has plummeted by $100, equivalent to more than 2 million VND per tael (approximately 37.5 grams). (Illustrative image: KT) |
Commodity analyst Carsten Fritsch of Commerzbank said,gold priceGold has lost approximately $100 since the beginning of this week's trading session, reaching its lowest level in two months. Currently, gold is in a sell-off phase.
Last week, gold prices remained relatively stable, fluctuating around $1,950 per ounce. However, at the start of trading this week (September 21st), the price plummeted to $1,893 per ounce, and by September 25th, it had fallen further to $1,850, equivalent to 52 million VND per tael. The price difference between domestic and international gold prices remains very high, nearly 3 million VND per tael.
However, expert Carsten Fritsch notes that a price reversal is very likely for this precious metal.
International financial institutions also stated that the drop in gold prices is not a trend but merely a temporary situation. The upward trend in gold prices remains intact as inflation expectations are projected to rise after the recent period.US presidential electionnext November.
Commerzbank believes that the expansionary monetary policy of the US will continue for many years, and this ultimately creates a bullish environment for gold.
Investment fundGlobal Currency Strategy (US) assesses that, sooner or later, the US dollar will weaken again, which is a positive factor supporting the rise in gold prices. TD Securities (Canada) comments that the upward trend in gold prices is being challenged by a series of factors ranging from the strength of the US dollar and the US presidential election to the resurgence of the Covid-19 pandemic.
TD Securities also pointed out that gold ETFs have continued to buy gold in recent days. This indicates that investor sentiment towards gold remains unchanged.