The gold market resumed stability shortly after a quick increase on March 16 after the US Federal Reserve (Fed) raised its interest rates, while the US dollar lost in value compared to other major currencies, which experts described as going against common rule.
Analysts said that normally, a rise in US interest rate will lead to increases of the value of other forms of property and therefore pulling gold price down.
However, market developments on March 16 did not follow that rule, as right after Fed’s announcement, world gold price was up 1.5 percent to the highest level in a week. Meanwhile, domestic price also rose above the long-stable price of 36.5 million VND (1,601 USD) per tael (one tael is equivalent to 37.5 grams).
Dr. Nguyen Tri Hieu, a finance-banking expert, held that despite the unexpected developments of the market, major fluctuations have not occurred as the Fed decision has been anticipated.
Instead of declining, gold price on March 16 increased due to instabilities surrounding the elections in the Netherlands and France as well as negotiations on the UK’s separation from the EU, he said.
At the same time, he asserted that incomprehensible management policies of US President Donald Trump and the increased demand for gold in the world significantly contributed to the hike in gold prices.
On March 16, domestic gold prices also increased sharply initially due to influence from the world market but then quickly regained stability.
According to a representative of Doji Group, the rise in domestic gold price has yet to match that in the global market. The representative attributed the situation to surplus supply and weak demand.
On March 17, domestic gold price saw little change from the day before. As of 17:00, Doji Group listed its SJC gold price in Hanoi at between 36.6 million VND (1,562 USD) and 36.7 million VND (1,566.8 USD) per tael, a slight decreased compared to prices early of the day.
Meanwhile, world price continued the rising trend amidst the devaluation of the US dollar.