In the short term, profit-taking pressure in the gold market is still high, but experts say that the price of this precious metal still has many strong supporting factors in the medium and long term…
Last week, the spot gold price in the world market set an all-time record above the threshold of 3,700 USD/oz, but could not maintain this important psychological price level due to the caution of the US Federal Reserve (Fed), causing the gold price momentum to somewhat weaken.
In the short term, profit-taking pressure in the gold market is still high, but experts say the price of this precious metal still has many strong supporting factors in the medium and long term.
Starting a new trading week in the Asian market this morning (September 22), the spot gold price in the Asian market increased slightly. At 6:15 am Vietnam time, the spot gold price increased by 2.4 USD/oz compared to the closing price last week in the US market, equivalent to an increase of 0.07%, trading at 3,688.4 USD/oz. Converted according to the USD selling rate at Vietcombank, this price is equivalent to about 117.5 million VND/tael.
Spot gold rose 1.2% last week, its fifth straight weekly gain. The record price of gold was recorded at more than $3,707/oz on Wednesday, after the Fed ended its monetary policy meeting with a decision to cut interest rates by 0.25 percentage points.
Speaking to Kitco News, BNP Paribas Fortis chief strategist Philippe Gijsels said that gold prices could struggle around $3,600/oz in the short term, but are unlikely to fall further, as the Fed has finally resumed its easing cycle.
“Gold prices have risen almost 40% this year, but we are still in the early stages of this bull market. In a world of uncertainty, demand for gold remains strong and prices could easily reach $4,000 an ounce by the end of 2026,” said Mr. Gijsels.
Christopher Vecchio, chief strategist at Tastylive.com, agrees that buying gold at $3,700 an ounce is still reasonable. “I’ve been trying to find reasons to be bearish on gold, but I haven’t found any,” he said.
According to this strategist, despite the high price of gold, central banks continue to buy gold because of the weakening confidence in the US dollar. This decline in confidence stems from the Trump administration’s attempts to intervene in the Fed, as well as Washington’s unsustainable increase in public debt.
“Central banks will continue to move away from the US dollar, and gold is the most logical option they have,” said Mr. Vecchio.
In its updated interest rate forecast, the Fed is expected to cut rates two more times this year and once in 2026, less than the market’s expectation of two or three cuts next year. However, some analysts believe the Fed could still cut rates more aggressively, especially if Mr. Trump appoints more of his confidants and the Fed’s Board of Governors.
Mr. Stephen Miran – a close advisor of Mr. Trump who was newly appointed to the Fed governor position last week – wants the Fed to cut interest rates by 0.5 percentage points at the recent meeting.
“Mr Miran’s move… says a lot about what could happen. A deeper rate cut, especially in a context of high inflation, would push gold prices even higher,” said Commerzbank analyst Carsten Fritsch.
World gold price movements over the past 10 years. Unit: USD/oz – Source: Trading Economics.
But some analysts also warn of increased volatility in the short term due to profit-taking at the peak. The 40% gain in gold prices so far this year is the biggest one-year gain since the late 1970s.
“Gold traders see this as an opportunity to book profits… I believe there is a strong possibility that gold prices are about to enter a consolidation phase,” said Naeem Aslam, chief investment officer at Zaye Capital Markets.
Gold prices will be sensitive to US inflation data due this week, particularly the personal consumption expenditures (PCE) price index due on Friday, Mr. Aslam said. PCE is the Fed’s preferred inflation measure.
“If inflation persists longer than expected or there is new worrying political news, gold prices could quickly accelerate to the $3,750-$3,800/oz mark,” Mr. Aslam said.
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