Global economic uncertainties, the weakening US dollar, and the growing trade tension between the US and China are anticipated to drive the gold forward in 2019.
The gold hit $1,297.1 per ounce in Asia on the January 4 trading session right after the New Year holiday, jumping more than $10 per ounce (0.7 per cent) compared to the previous day.
This was the largest growth in the past six months, driving the gold price near the $1,300 benchmark.
Local gold experts claim gold has been on an upward trend for nearly two months and it has picked up nearly $100 per ounce since mid-November last year.
Analysts at major local jewel company Phu Nhuan Jewellery JSC have attributed the soaring gold to the weakening USD in the global market, which lost 0.6 percentage points to 96.02 points, and the sharply declining US stock market in recent trading sessions.
Tran Thanh Hai, chair of the Vietnam Gold Business Corporation (VGB) commented that the appreciating USD in the past year (driven by the US Federal Reserve’s repeated hikes) was one of the major factors holding back the surge in gold price in 2018, and the currency’s weakening would reverse this trend, putting wind in the sails of gold.
Analysts at major local commercial lender Eximbank were also of the opinion that the weakening greenback and the continuing US-China tension, as well as economic vulnerabilities underpin the price of gold this year.
Experts even forecast that the rising gold could be the leading trend throughout the year.
According to the World Gold Council (WGC), there is a high likelihood for an upsurge in gold prices this year as international investors have few risk hedge assets in the current context of increasing economic and geopolitical uncertainties.
Global investors have increased buying greenbacks as a means to mitigate risks amid the intensifying US-China trade spat, but the situation this year might be different as gold is forecast to be a safe asset for risk mitigation, while the USD will lose its shine.
US Citi Bank unveiled that they would start buying the precious metal when it fell to a more attractive level.
Many local financial experts agreed that the gold’s upward trend could maintain well into this year by virtue of strong supportive factors.
The bank analysts predicted that as the global stock market has been on a continuous fall, some major economies have been coming out with stimulus programmes, and amid rising geo-political risks, gold could beat the $1,300 per ounce benchmark this year and might even reach $1,400 per ounce by the end of the third quarter, averaging $1,365 per ounce in the whole year.
Many local financial experts agreed that the gold’s upward trend could maintain well into this year by virtue of strong supportive factors.
Simultaneously, regardless of market movements, the price of gold is always higher in the domestic market, and the price gap is forecast to average VND4 million ($175) per tael, according to Hai from VGB.
https://english.vietnamnet.vn/fms/business/215766/gold-anticipated-to-keep-climbing-in-2019.html
