Gold market movements are showing a notable pattern, particularly a divergence between domestic and global prices on April 16.

At the close of the April 16 session, SJC gold bar prices dropped sharply by about VND2.3 million/tael, falling to around VND167.7-171.2 million/tael; gold ring prices saw a similar decline. Meanwhile, the world gold price at one point rose to $4,825/ounce.

On April 17, both domestic and international markets moved in the same downward direction, with SJC gold easing to around VND167.5–171 million per tael, while global prices hovered below $4,800 per ounce.

On April 18, the market rebounded again. Global gold rose to around $4,829 per ounce, pulling domestic prices up in tandem.

These developments show that Vietnam’s gold market does not always move in lockstep with global trends.

Analyzing the “divergence-then-convergence” pattern, Nguyen Quang Huy from Nguyen Trai University said the temporary mismatch reflects transmission lag and Vietnam’s unique pricing mechanism.

During periods when world prices rise rapidly, the domestic market is affected by internal supply and demand, policy expectations, and the regulatory rhythm, so it often does not react instantaneously. 

When domestic price levels have risen previously and accumulated a large gap, rebalancing pressure appears, leading to downward adjustments even when international prices have not yet reversed.

Notably, expectations on market stabilization and the orientation to narrow the price gap also contributed to domestic prices adjusting one step earlier before returning to the general trend.

“It can be said that this is not an unusual 'contradiction,' but a calibration process to bring prices back to a more reasonable trajectory. Overall, this price drop session is merely a technical adjustment within a broader trend that has not been broken.

“Internationally, gold is still supported by fundamental factors, such as expectations of more flexible monetary policies, risk-hedging demand, and the trend of asset diversification. These factors create a 'cushion' for the medium-term trend. Meanwhile, the domestic market has just experienced a rapid growth phase with a large gap compared to the world; therefore, an adjustment is necessary to reduce accumulated pressure and consolidate the price floor,” said Huy.

He added that in the short term, the gold market is entering a phase of adjustment and accumulation. In the medium term, the trend has not shown clear reversal signals, and in the long term, it continues to depend on global macro variables.

Global tensions 

Nguyen Tri Hieu, a finance and banking expert, argued that the cause of continuous gold price fluctuations, with alternating increases and decreases that are now returning to an upward trend, primarily comes from global geopolitical situations, especially tensions in the Middle East. 

Developments surrounding the ceasefire agreement between the US and Iran have made investors uneasy. These factors are keeping gold prices in constant turmoil.

Hieu said that the geopolitical situation in the Middle East remains very unpredictable.

In this context, gold prices are forecast to continue fluctuating but in an upward trend. The probability of domestic gold prices increasing following the world trend is high, at about 60 percent in the coming time.

Vietnam’s gold market is influenced by two main factors. First is the movement of world gold prices amid geopolitical instability that shows no signs of cooling down. Second is the limited domestic gold supply, which keeps gold prices at high levels.

Additionally, US monetary policy is a notable factor. The US Federal Reserve (Fed) is thought unlikely to reduce interest rates amid inflation concerns. Although maintaining high interest rates may put pressure on gold prices, inflation and the USD Index at around 98.42 (below the 100 mark) remain the factors supporting gold prices.

Gold price gap poses risks

Regarding the gap between domestic and international gold prices (it currently stands at about VND17 million/tael), Hieu said though it has narrowed compared to the previous VND28 million/tael level, it is still very high and poses a big risk for investors.

“A reasonable gap should only be about VND5 million/tael after calculating costs and exchange rates,” Hieu said.

He believes that, in the short term, the gap is unlikely to decrease to a reasonable level because domestic gold prices are anchored at a high level based on world prices and limited supply.

Tam An