Geopolitical tensions escalate, gold nears old peak

At the end of the week, spot gold prices stood at $3,432/ounce, up more than 3.6% compared to the previous week, largely due to the breakout on Friday. Gold futures for August 2024 delivery on the Comex New York floor also increased by more than $50/ounce on the last trading day of the week, closing last week at $3,452.6/ounce.

Gold prices jumped more than 1% on Friday, approaching a record high of more than $3,500 an ounce set in April 2025. Investors sought safety amid rising geopolitical tensions and economic uncertainty. The rally came after Israel launched a preemptive strike on Iran, raising concerns about a broader conflict in the Middle East. Israeli Prime Minister Benjamin Netanyahu said the attack was aimed at Iran's nuclear program.

Meanwhile, demand for safe-haven investments continues to be fueled by growing uncertainty over U.S. trade policy. President Donald Trump said he would send letters to trading partners in the next week or two to impose unilateral tariffs on a range of countries. Meanwhile, U.S. Treasury Secretary Scott Bessent signaled the possibility of extending a 90-day pause on reciprocal tariffs for countries that show “good faith” in ongoing trade negotiations. The 90-day pause on reciprocal tariffs is set to expire on July 9.

A number of data releases this week have raised expectations that the Federal Reserve will cut interest rates further this year, providing further support for non-yielding assets such as gold. Headline inflation came in at 2.4% year-on-year, close to the Fed’s target. That was up 0.1% month-on-month, below expectations. The latest report on PPI inflation for May was lower than expected. Inflation figures are showing that President Donald Trump’s tariff hikes have not yet boosted consumer price inflation as previously predicted.

In a new development related to tariff policy and trade tensions between the US and China, President Donald Trump announced on Truth Social that import tariffs on Chinese goods will increase to 55%, including the current 30% tariff and an additional 25% for some specific products. Although the White House later clarified that this was not a new increase, the announcement still raised concerns about the US's unilateral trade strategy and its negative impacts on the global supply chain.

World gold prices continue to increase and approach the record level set last April.

The breakthrough on Friday in the world market quickly spread its impact to the domestic gold price. SJC gold bars returned to surpass 120 million VND/tael for the first time in nearly 3 weeks.

By the end of the week, Saigon Jewelry Company (SJC) listed around VND117.8 million/tael (buy) and VND120.3 million/tael (sell), up VND3.1 million/tael for the whole week. For most of the week, despite the world price skyrocketing, the domestic gold market was quite stable thanks to regulatory factors and stable supply. The draft amendment to Decree 24/2012/ND-CP has fulfilled expectations. This is expected to help reduce the gap between domestic and world gold prices.

While gold is approaching its old peak, the USD price continues to probe the bottom when returning to the lowest trading price in the past 3 years. The DXY index measuring the strength of the greenback, although inching back, is still only over 98.18 points. The central exchange rate announced by the State Bank is currently at 24,975 VND/USD, down 15 VND/USD compared to the previous session and down 17 VND/USD compared to a week ago.

In contrast to the central exchange rate, the exchange rate at commercial banks continued to climb and reach the regulated ceiling exchange rate. With a margin of +/-5% as regulated, the ceiling exchange rate has decreased to 26,223 VND/USD. At Vietcombank , the USD exchange rate is traded at 25,863 VND/USD (buying by transfer) and 26,223 VND/USD (selling).

Geopolitical tensions in the Middle East will remain in focus next week following Israel’s attack on Iran’s nuclear facilities. Investors will also be closely watching any developments in trade talks between the US and its major trading partners. Attention will also turn to the G7 summit in Canada, where leaders of the world’s largest economies will meet to discuss major global challenges.

Meanwhile, several central banks are meeting next week. In addition to the Fed, the People’s Bank of China, the Bank of Japan and the Bank of England are all expected to keep rates unchanged. Decisions will also come from major central banks in Switzerland, Sweden, Norway, Turkey, Brazil, Indonesia, the Philippines and Taiwan.

Source: https://baodautu.vn/cang-thang-dia-chinh-tri-leo-thang-vang-tien-gan-dinh-cu-d304480.html