Why did the price of gold plummet?
In just the last 5 trading sessions, the price of gold has "evaporated" more than 2 million VND per tael, making investors in this precious metal extremely worried.
Kitco News reported that Commerzbank's analysis said that the recent plunge in gold prices was due to massive selling. Currently, the world gold price is trading at 1,865.7 USD/oz. Converted to the USD price at Vietcombank, 1 USD = 23,280 VND, each tael of world gold is equivalent to 52.32 million VND, 2.88 million VND/tael lower than the selling price of SJC gold.
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| In just 5 days, the world gold price has "evaporated" 100 USD, equivalent to more than 2 million VND/tael. (Illustration: KT) |
Commerzbank commodities analyst Carsten Fritsch said,gold pricelost about $100 since the beginning of this week, hitting a two-month low. Gold is currently in a sell-off phase.
Last week, gold prices were still moving smoothly when the price was still fluctuating around the 1,950 USD/ounce mark, but entering the first trading session of the week (September 21), the gold price dropped straight to 1,893 USD/ounce and by September 25, the gold price plummeted to 1,850 USD, equivalent to 52 million VND/tael. The difference between domestic and world gold prices is still very high, nearly 3 million VND/tael.
However, expert Carsten Fritsch notes that a price reversal is very likely for the precious metal.
International financial institutions also said that the decline in gold prices is not a trend but just a moment. The upward momentum in gold prices remains intact as inflation expectations are forecast to increase after theUS Presidential Electionnext November
Commerzbank believes that the US expansionary monetary policy will continue for many years, and this ultimately creates an environment for gold prices to increase.
Investment fundGlobal Currency Strategy (USA) assessed that sooner or later, the USD will weaken again and be a positive factor supporting the increase in gold prices. TD Securities Bank (Canada) commented that the gold price increase is being challenged by a series of factors from the strength of the USD, the US presidential election to the resurgence of the Covid-19 epidemic.
TD Securities also pointed out that gold ETFs have been buying gold in recent days, showing that investment sentiment in gold has not changed.
