Global gold prices fell sharply at the start of the week, marking one of the steepest corrections seen in recent weeks. Mounting profit-taking after a prolonged rally, combined with a strong rebound in global stock markets, has prompted investors to pull funds out of gold — the traditional safe-haven asset.
According to data from the New York exchange, spot gold dropped more than $125, or 3.1%, falling below the $3,990/oz level — equivalent to roughly VND 127.3 million per tael at current exchange rates. December gold futures on the Comex exchange also declined similarly, settling at $3,987/oz. Compared with its all-time high near $4,381/oz reached in mid-October, the precious metal has lost about VND 12.4 million per tael in just one week.
The main cause of this steep decline comes from widespread profit-taking after gold’s extended rally. In addition, the U.S. dollar’s rebound and rising Treasury yields have increased the opportunity cost of holding non-yielding assets like gold. Meanwhile, global stock markets — especially in the U.S. — surged, drawing investment flows away from gold.
Specifically, the S&P 500 rose nearly 1.4% in the first trading session of the week, marking three consecutive days of gains. Strong performance in large-cap tech stocks such as Apple, Nvidia, and Microsoft helped boost investor optimism, thereby reducing demand for safe-haven assets like gold.
Furthermore, signs of easing U.S.-China trade tensions also contributed to gold’s decline. Reports suggest that the two largest economies are resuming dialogue and exploring greater cooperation in trade and technology, easing concerns about geopolitical risks that had previously supported gold prices.
However, many analysts believe this is merely a short-term correction within a longer-term upward trend. Edward Moya, senior market analyst at OANDA, commented, “It’s natural for gold to pull back after such a strong rally. If the Fed maintains a dovish monetary stance, gold could easily climb back above $4,200/oz in the coming months.”
Investors are now closely watching upcoming U.S. economic data, especially the PCE inflation index, which is the Federal Reserve’s preferred measure of inflation. If the data shows continued easing in price pressures, expectations for a rate cut in December will likely increase — a scenario that typically supports gold prices.
Conversely, some major financial institutions have warned that if equities continue to rise and the U.S. dollar strengthens further, gold could face another wave of selling pressure before stabilizing near the $3,900/oz support level.
In summary, profit-taking pressure, a stronger dollar, and a renewed risk-on sentiment in equity markets are currently weighing on gold prices in the short term. Yet, given the ongoing global economic uncertainties — particularly surrounding the Fed’s rate path — gold remains viewed as a resilient asset with strong medium- to long-term recovery potential.
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