The world gold price suddenly plummeted by 80 USD, equivalent to a decrease of 2.5 million VND/tael in a day, the sharpest decrease in nearly 4 years. What is the reason for the shocking drop in gold price and how long will the decline continue?
In the morning trading session on November 25 in the US market (last night Vietnam time), the spot gold price plummeted, from 2,690 USD/ounce to nearly 2,610 USD/ounce, equivalent to a decrease of 2.5 million VND/tael (from 83.5 million VND to 81 million VND/tael).
This is a rare drop in such a short period of time, just a few hours. The decline occurred in the context of the market evaluating policy signals from the new administration of Donald Trump, as well as geopolitical developments in many hot spots.
According to experts on Kitco, the decline in gold prices is primarily due to profit-taking pressure after the commodity rose sharply by about 6.5% (about 170 USD) last week (due to escalating tensions between Russia and Ukraine). Investors are cautious as the US is about to release the minutes of the Federal Open Market Committee (FOMC) meeting, which will include signals about the interest rate policy of the US Federal Reserve (Fed).
Selling pressure also increased ahead of the Thanksgiving holiday this weekend.
Donald Trump’s choice of hedge fund billionaire Scott Bessent as US Treasury Secretary, instead of Howard Lutnick, is said to be changing market sentiment. Market observers interpret this as a signal that Trump may have less harsh trade policies than he has announced, especially with China.
Mr. Scott Bessent is considered a cautious executive and has a priority view of reducing domestic taxes, cutting spending and maintaining the position of the USD.
On Kitco, Saxo Bank experts said that Bessent's reputation as a fiscal hawk is likely to bring stability to the US economy . Mr. Bessent's views could ease investors' concerns about the US debt situation, thereby reducing the appeal of gold as a safe-haven asset.
In addition, the Russia-Ukraine conflict shows signs of cooling down, and there is information that Israel and Lebanon are preparing for a ceasefire.
The sudden influx of information has caused gold prices to drop sharply, thereby triggering short selling activities that have sunk this precious metal.
The Middle East has received unexpected good news and tensions in the region may ease after Israeli Prime Minister Benjamin Netanyahu approved a new ceasefire agreement with the Lebanese militant group Hezbollah "in principle".
The parties are still negotiating the details of a 60-day ceasefire, but it is the first positive sign in months.
Information from the Pentagon that there is no sign of North Korean soldiers present in Ukraine and the fact that Congressman Mike Waltz - who was chosen by US President-elect Donald Trump as National Security Advisor - has outlined the new administration's strategy to resolve the Russia-Ukraine conflict... are also considered good signs.
However, geopolitical conflicts remain a potential factor that could flare up at any time and push gold prices back up. The Israel-Lebanon negotiations are just beginning. The Russia-Ukraine situation continues to escalate.
On the economic front, investors are also waiting for the minutes of the Fed's November FOMC meeting to analyze the US monetary policy signal. This week, the US will release revised GDP data and core PCE data. This will determine whether the Fed will accelerate interest rate cuts, thereby affecting the USD and gold.
In 2025, many experts still hold the view that gold prices will continue to increase. WisdomTree's head of commodity and macroeconomic research - Mr. Nitesh Shah shared on Kitco that he expects the USD to decline in 2025, thereby pushing gold prices up.
According to this expert, in his first term, Mr. Trump's policies pushed the USD up. However, this time will be different because the US budget deficit is increasing sharply. Investors are ready to return to buy gold at any time. Nitesh Shah predicts that gold will reach $2,850/ounce in the fourth quarter of 2025.
Nitesh Shah also mentioned the possibility of gold reaching $3,000, but said that it is necessary for US bond yields to fall sharply.
According to Nitesh Shah, the policies that Mr. Trump mentioned, including tax cuts, will lead to increased inflation - a positive factor for gold.
It is also worth noting, according to Shah, that investors are waiting for China to return to the gold market. Accordingly, Beijing cannot wait for gold to fall much lower because it would be waiting forever.
On the morning of November 26, the price of SJC gold bars and gold rings continued to decrease. The selling price of SJC gold bars decreased by another VND1.8 million/tael for buying gold compared to yesterday afternoon, down to VND82.8 million/tael. The selling price decreased by VND1.3 million to VND85.3 million/tael. Yesterday, SJC decreased by VND400,000/tael.
The price of gold rings also decreased from 1.2-1.5 million VND/tael compared to yesterday afternoon. Gold rings at Bao Tin Minh Chau Company decreased to 82.7 million VND/tael (buy) and 84.6 million VND/tael (sell).
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Source: https://vietnamnet.vn/gia-vang-lao-doc-manh-nhat-mat-2-5-trieu-sau-1-dem-lieu-co-giam-tiep-2345630.html
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