Gold prices maintain upward momentum thanks to high demand

In the domestic market, last week, the price of SJC gold bars and gold rings only recorded a few downward adjustments on the path of "diligent" increase since the beginning of the week of April 8.

Closing the weekend session on April 13, the price of SJC gold bars traded at Saigon Jewelry Company was at 81.8 - 83.8 million VND/tael (buy - sell), equivalent to an increase of 1.88 million VND/tael compared to the end of last week. Meanwhile, the listed price of gold rings at Bao Tin Minh Chau Jewelry Company was at 74.18 - 76.08 million VND/tael (buy - sell), equivalent to an increase of 1.56 million VND/tael.

Previously, at one point during the week, the price of SJC gold reached 85 million VND/tael and ring gold conquered the 75 million VND/tael mark.

This move took place right after the Prime Minister's conclusion at a meeting on solutions to manage the gold market and the State Bank of Vietnam informed that it was ready to intervene to stabilize the gold market.

According to Deputy Governor of the State Bank of Vietnam Pham Thanh Ha, for the gold bar market, the State Bank will increase supply to handle the high difference between domestic gold prices and world gold prices. For the gold jewelry and fine art market, it will continue to create maximum conditions to ensure sufficient raw materials for production activities for export.

At the same time, the State Bank will coordinate with relevant ministries and branches to inspect, supervise and monitor the activities of enterprises; require enterprises to deploy the use of electronic invoices in gold buying and selling transactions to improve transparency and efficiency. At the same time, strictly handle acts of gold smuggling across the border, profiteering, speculation and manipulation of gold prices.

Regarding inspection activities, the State Bank and ministries and branches have established inspection teams and will deploy them this April.

Currently, the market is waiting for the amendment of Decree 24/2012/ND-CP dated April 3, 2012 of the Government on the management of gold trading activities.

According to Expert Can Van Luc, Member of the National Financial and Monetary Policy Advisory Council, the Government and the State Bank continue to adhere to the anti-gold and gold reduction policies in amending the mechanisms and policies for gold management and gold trading activities, thereby also reducing the problem of dollarization of the economy.

Overall, the anti-goldenization process under Decree 24/2012/ND-CP has been successful, but the decree was issued 11 years ago and it is time for a change.

Accordingly, Decree 24/2012/ND-CP on the management of gold trading activities needs to be amended to be closer to the market context. From there, establishing a balance between supply and demand in the current market.

Also in the conclusion of the Prime Minister at the meeting on solutions for managing the gold market, the Prime Minister assigned the State Bank of Vietnam to preside over and coordinate with relevant agencies to continue researching, reviewing, carefully assessing the impact, and fully summarizing the implementation of Decree 24/2012/ND-CP to propose appropriate amendments and supplements, ensuring close adherence to the Party's guidelines and policies, the Government's and the Prime Minister's directions in managing the gold market, in line with the practical situation and economic developments in the country, the region and the world, preventing the goldification of the economy, not letting the impact of gold price fluctuations on exchange rates, inflation and macroeconomic stability, enhancing the State's role in managing and regulating the gold market in accordance with regulations, ensuring economic security, national financial and monetary security and social order and safety.

Going forward, HSBC Bank predicts that gold prices will fluctuate between $1,975 and $2,500 per ounce. The bank notes that increased geopolitical risks and elections in many countries this year have provided significant support for gold prices.

Goldman Sachs also raised its gold price forecast for the end of this year from $2,300/ounce to $2,700/ounce.

Will Rhind, CEO of precious metals trading company GraniteShares, said that demand for gold will be very strong this year, due to gold purchases by central banks to diversify foreign currency reserves and hedge against the risk of an unstable US dollar.

However, UBS Bank analyst Giovanni Staunovo said that for the next strong rally in gold prices, demand from gold exchange-traded funds would still need to recover, and that would require the US Federal Reserve (Fed) to lower interest rates.

Last week, consecutive records were set in the world gold market. Accordingly, the world gold price increased by more than 2,400 USD/ounce, reaching a record high in the session of April 12, when escalating tensions in the Middle East caused investors to seek "shelter" in safe assets.