Multiple factors supporting gold price hikes

Global gold prices surpassed the $5,200 per ounce threshold for the first time. Domestically, on the afternoon of January 28, SJC gold bars skyrocketed, exceeding VND184m per tael, while gold rings rose to VND183m per tael.

"The strong surge in gold prices is not too surprising, as global central banks continue to diversify reserves, increasing the proportion of gold and reducing dependence on the USD," gold expert Chu Phuong told VietNamNet.

Phuong said though the purchasing volume of central banks is no longer as high as in previous years, the fact that gold is still chosen as a strategic reserve asset has created a solid foundation for long-term price increases, bolstering investor confidence.

Furthermore, the surge on January 27 and 28 mainly stemmed from notable statements by US President Donald Trump regarding USD management. This information caused the greenback to weaken sharply, at one point falling to the 96-point range, the lowest level in many months. When the USD depreciates, assets priced in this currency, including gold and silver, will rise strongly.

Additionally, the market is particularly concerned about the Federal Reserve's (Fed) monetary policy meeting on the morning of January 29 (Vietnam time). Although most forecasts suggest the Fed will keep interest rates unchanged, investors are still waiting for its assessment of the labor market and prospects for policy easing in 2026 and subsequent years.

Phuong noted that personnel changes at the Fed are also under close scrutiny. With the current Fed Chair nearing the end of his term and the possibility that Trump may nominate a more dovish figure on monetary policy, the USD could continue to weaken. A low-interest-rate environment and accommodative policy would be supportive for gold prices.

"Even when Fed has not officially cut interest rates, the market is trading based on a rate-cut scenario. This expectation has contributed to pushing gold prices up sharply in recent sessions," Phuong noted.

Economic expert Phan Dung Khanh also believes that the current gold price rally is influenced by various factors, including geopolitical tensions and uncertainties in global economic policy. Moreover, President Trump's repeated desire for the Fed to lower interest rates soon creates pressure on monetary policy. In this context, the new Fed Chair to be nominated by Trump is likely to lean toward a more loosened stance, further weakening the USD.

“When the USD depreciates, assets priced in that currency, including gold, are supported. Alongside this, tariff policies are also contributing to higher demand for safe-haven assets,” Khanh said.

Notably, demand for gold reserves from central banks and major financial institutions continues to rise, with the participation of new players. For example, the Central Bank of Poland has stepped up gold purchases, while Tether, the issuer of the USDT stablecoin, has significantly increased its gold holdings to nearly 140 tons after buying about 27 tons late last year.

Domestic prices

Phuong believes that in addition to global developments, gold prices are affected by the downward trend in exchange rates. When the USD becomes less attractive, a segment of investors tends to shift cash flows into gold.

According to the expert, the domestic gold market often tends to rise faster than the world, but decreases slowly when international prices cool down. "Therefore, domestic gold prices are currently staying at high levels and show no signs of a sharp decrease in the short term," she said.

When asked if domestic gold prices could reach VND190 million per tael, Phuong stated that this is entirely possible with current momentum. "Many large banks in the US and Europe have considered a scenario where gold prices reach $6,000 per ounce this year. In that context, the VND190m mark in Vietnam or even higher expectations is not too far-fetched," Phuong assessed.

Regarding investment strategy, Phuong recommended that investors only buy gold when the market is more stable. When prices surge as they are now, accessing gold is difficult as brands limit transactions. According to her, gold should be viewed primarily as am asset to preserve value, rather than a short-term speculative tool.

"Investors should prepare capital and wait for adjustment cycles to buy at more reasonable prices. FOMO (Fear Of Missing Out) during 'hot' periods carries many risks," she warned. For long-term strategy, Phuong suggested allocating about 10–15 percent of the investment portfolio to gold.

Manh Ha