Washington [US], October 9: Gold prices continue to fluctuate at high levels while the long-term trend seems to be still increasing, while also posing many risks for investors.
Earlier this week, gold prices fell slightly, believed to be due to the strong USD and the US economic situation showing that the US Federal Reserve (Fed) is unlikely to cut interest rates in November.
Sky-high gold prices cause market turmoil and investor anxiety
However, the price of gold as of yesterday (October 8) was still close to the peak of 2,650 USD/ounce. At the current level, the price of gold has increased by 45.93% within 1 year and if only counting the past 1 month, the price of gold has increased by about 6.8%. Throughout the past year, the price of gold has continuously broken the peak and set records such as 2,550, 2,600 and 2,650, even at times almost reaching 2,700 USD/ounce.
However, this may not be the peak of gold prices. Reuters quoted Mr. Peter A. Grant, Vice President and Senior Strategist at Zaner Metals - a company specializing in providing investment services, as saying: "The strength of the US dollar is a short-term headwind at this time preventing a new all-time high for gold. But I still see the short-term potential for gold to reach $2,700 and the long-term target of $3,000/ounce due to safe-haven demand from geopolitical tensions and political uncertainty, especially as the US election approaches."
Similarly, recently, Newsweek also quoted an investment expert predicting: "In March, the price of gold reached $2,070/ounce and over the past 6 months, despite some declines, the price of gold has continued to increase. When I saw the price of gold reach $2,600/ounce, I thought it would reach $2,800/ounce by the end of this year. But with what is happening, the price of gold could even reach $3,000/ounce this year."
Unstoppable growth?
Assessing the price of gold in the coming time, the Market Watch website yesterday quoted analysts as saying that the increase will not last forever. Accordingly, the gold price is still increasing based on expectations of the recovery of the Chinese economy and the Fed will soon cut the operating interest rate . Now, both of the above factors are unlikely to happen, so the increase in the price of gold may be stopped.
However, many analyses also show that the "motivators" that push gold prices higher are still continuing. Specifically, geopolitical instability is still increasing, such as conflicts in the Middle East or Ukraine. In particular, conflicts in the Middle East are showing signs of increasing without any positive signals for ceasefire agreements. In the short term, the US election is entering its final stages and the results are difficult to predict, and this becomes a factor that can push gold prices higher.
In the long term, the separation of the global economy, notably the US-China trade conflict as well as Europe's increasing barriers to Chinese goods, also pushed gold prices higher. Also in the separation of the economy, the BRICS bloc (a group of emerging economies) is adding more members while promoting the trend of reducing dependence on the USD in payments, making gold a "favorite item" in reserves during the transition period of the "de-dollarization" process.
The above factors are all catalysts that can cause gold prices to continue to increase. However, all investment resources and price increases will have limits and it is very difficult to predict exactly where the peak of gold prices will be. Therefore, many people who continue to believe in the trend of gold prices rising and then pour money into buying may fall into the situation of "not being able to get out in time" leading to significant losses, especially in the context of gold prices being too high as it is now.
Source: Thanh Nien Newspaper