Market Newsletter on 11/6/2023

Gold falls into a less favorable investment cycle

 Precious metals analyst at Standard Chartered said that in the summer months, the price of gold is likely to fall due to the slowing of the investor consumption cycle.

Gold price opened on the first day of the week, June 12, gold bars of national brand SJC of Saigon Jewelry Company (SJC) listed for buying and selling in the range of 66.4-67 million VND/tael.

Gold price today is equal to the price 1 week ago in both buying and selling direction. Thus, for 2 consecutive weeks, the gold price was almost unchanged.

Currently, the price difference between buying and selling has decreased by 100,000 VND/tael, to 600,000 VND/tael.

The price of gold jewelry, 24K gold rings of all kinds today traded around 55.6 – 56.55 million VND/tael, respectively. Compared to last week, gold price today increased slightly by 100,000 VND/tael. The difference between buying and selling gold jewelry decreased by 50,000 VND/tael, remaining at 950,000 VND/tael.

At the opening of the week, it can be seen that today’s gold price in the domestic market is trying to hold on to the threshold of 67 million dong/tael despite the fluctuations in world gold prices over the past weeks when moving away from the threshold of 2,000 USD/ounce.

Gold jewelry, gold rings, after a period of closely following the world gold price, but the decrease is also less, now there is a significant gap compared to the world gold..

Currently, the gap between domestic and international gold prices inched up compared to last week, world gold is about 11.5 million dong/tael lower than SJC gold bar, about 1 million dong/tael lower than ring gold.

Gold price today on the international market did not meet expectations, although before that, both analysts and investors expected the precious metal to maintain its upward momentum. 

However, analysts believe that the gold price will hardly increase strongly until the US interest rate hike cycle ends, and the $2,000/ounce price zone could be a short-term recovery point for the precious metal in the coming days. .

The world spot gold price stood around the threshold of 1,955.6 USD/ounce. Gold futures for August delivery on Comex New York were at $1,969.2 per ounce.

In the summer months, gold prices are likely to fall as investor consumption cycles slow, said Standard Chartered precious metals analyst.

The analyst is forecasting gold prices to average $1,975 an ounce in the second quarter and $1,925 an ounce in the third quarter.

Sentiment in the gold market remains upbeat but analysts are warning investors not to expect prices to break above $2,000 an ounce this week.

Kitco News’ latest weekly gold survey shows that retail investors on Main Street remain bullish on gold in the near term. However, Wall Street analysts are more cautious.

This week, 21 Wall Street analysts participated in Kitco News’ gold price survey. Among the participants, 9 analysts (43%) are optimistic about gold in the near term. At the same time, 2 analysts (equivalent to 10%) think the price will fall and 10 analysts (48% equivalent) see the price trading sideways.

Meanwhile, 692 votes were cast in Main Street online polls. Of these, 435 respondents (63%) expect gold to rise in the new week. Another 159 (23%) say precious metals will be lower and 98 (14%) are neutral in the near term.

While there is still solid optimism in the market, retail investors don’t expect prices to break above $2,000 an ounce either. Retail investors see the precious metal ending next week around $1,992 an ounce.