Sustainable gold price uptrend

Analysts believe that the current upward trend in gold is a sustainable rally.

In the Hanoi market, gold prices fluctuated, even losing the 74 million VND/tael mark at times during the first trading days of the week from December 11 to 13. On the morning of December 14, gold prices suddenly increased sharply right after the US Federal Reserve (Fed) decided to keep interest rates unchanged and said it could cut interest rates next year. After that, gold prices continued to move sideways until the end of the week.

At the end of the week, in the Hanoi market, Saigon Jewelry Company listed the price of SJC gold at 73.35 - 74.37 million VND/tael (buy - sell), unchanged from the previous session. At the same time, DOJI Jewelry Group listed the price of SJC gold at 73.2 - 74.4 million VND/tael (buy - sell), unchanged from the previous session.

Earlier, Fed Chairman Jerome Powell said the monetary policy tightening campaign may be over and the Fed began discussing when to lower interest rates.

The CME FedWatch tool shows that the market is pricing in a 70% chance of a rate cut in March. Lower interest rates increase the appeal of non-yielding assets such as gold.

“The Fed’s recognition of continued easing inflation pressures has increased expectations for rate cuts, sending bond yields and the dollar sharply lower, leading to a rally in gold and silver,” said David Meger, director of metals trading at High Ridge Commodities Trading. “We believe the current uptrend in gold is a sustainable one.”

Daniel Ghali, commodity strategist at TD Securities, said the Fed's dovish stance has helped the market bet on the possibility of a strong rate-cutting cycle in the near future.

According to expert Daniel Ghali, this supports gold prices, as investor demand is one of the missing factors to extend gold's rally to new record highs.