Shelter demand pushes gold prices up

Domestic gold price

At the close of the session on January 12, the price of 9999 gold bars at SJC Ho Chi Minh City was 73.5 million VND/tael (buy) and 76 million VND/tael (sell). SJC Hanoi listed at 73.5 million VND/tael (buy) and 76.02 million VND/tael (sell).

DOJI Hanoi listed at 73.45 million VND/tael (buy) and 75.95 million VND/tael (sell). DOJI Ho Chi Minh City bought SJC gold at 73.45 million VND/tael and sold at 75.95 million VND/tael.

International gold price

The price of gold on the Kitco floor (at 9:00 p.m. on January 12) was trading at $2,056/ounce. The price of gold futures for February 2024 delivery on the Comex New York floor was trading at $2,058/ounce.

At the current price, the world gold price converted to VND (including tax and processing fee) is about 14 million VND/tael different from the domestic SJC gold price.

Gold is testing resistance around $2,050 an ounce, with demand for safe havens rising amid a massive US-UK airstrike on Houthi forces in Yemen.

Nymex crude oil prices rose sharply and traded around $74.50 a barrel. Meanwhile, the yield on the 10-year US Treasury note is currently at 3.986%.

According to recently released data, the US consumer price index increased 3.4% compared to the same period last year. The core CPI increased 3.9% compared to the same period last year. Cleveland Fed President Loretta Mester said it may be too early for the central bank to cut interest rates in March 2024.

The dollar index continued to rise after data showed US consumer prices rose more than expected in December 2023, which could delay the Federal Reserve's interest rate cut to March 2024.

According to HSBC, the weakening USD pushed gold prices to a record high in the final month of 2023. While gold prices remain above $2,000/ounce, currency analysts at HSBC warn that this price level is unlikely to last long.

The market is overstretched and is expected to fall as higher prices hurt physical demand, weighing on jewelry and bullion sales. A rebound in the US dollar could weigh on gold.

Currently, the biggest driver of the USD is still the Fed's monetary policy. If the market becomes too optimistic about the monetary easing policy, it could create new momentum for the USD. Higher interest rates reduce the attractiveness of gold because gold does not generate a return.

Gold Price Forecast

Gold is highly sensitive to US real interest rates, and although there is a significant disconnect in this relationship, positive real interest rates could be a headwind for gold this year, according to HSBC.

Rising geopolitical tensions in the Middle East have given gold support above its 50-day moving average of $2,015 an ounce, said Kelvin Wong, market analyst at Oanda.