World gold price at 11:10 (Vietnam time) on October 27 decreased by 1.53%, down to 4,057.84 USD/ounce, after losing 3.3% last week.
The main reason is the sign of progress in trade negotiations between the US and China, when the two sides said they were "completing the final terms" of a comprehensive deal, coinciding with President Donald Trump's visit to Asia. The deal, if signed, would reduce economic risks and geopolitical tensions factors that have pushed gold prices to record highs.
Last week, gold hit a historic peak of over $4,380 an ounce, but quickly adjusted as the market thought the precious metal had been overbought and had a historic drop, losing nearly 6% in a session on October 21.
However, gold prices have risen more than 55% since the start of the year, supported by net buying by central banks and a wave of currencies flight as investors seek to avoid public debt and budget deficits.
The market is returning to a more basic and reasonable platform, said expert Kyle Rodda (Capital.com). "Investors' reaction is quite strong after the US-China trade information, which is much better than expected."
This week, the international financial market is also looking forward to a series of decisions from three major central banks: the US Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of Japan (BOJ).
The Fed is expected to cut interest rates by 0.25 percentage points, while the ECB and the BOJ are likely to keep their monetary policy unchanged.
Low interest rates often support gold prices, as precious metals are not interest-bearing and become more attractive when borrowing costs fall. However, the improving trade outlook has temporarily weakened the safe-haven trend.
At the same time, silver prices also fell after losing 6.3% last week. Bloomberg Dollar Index decreased slightly by 0.1%, while platinum and palladium increased.
In Kyoto (Japan), nearly 1,000 trading, brokerage and gold refining experts are attending the London Gold Market Association (LBMA) Annual Conference - an event with a record number of visitors. Analysts predict that the "war for talent" in the gold industry will be a hot topic, as strong price fluctuations cause investors and organizations to race to find leading experts.
According to experts, this week, gold prices are under downward pressure due to US-China trade optimism and low interest rate expectations. However, investors still need to be cautious in monitoring global monetary policy decisions - a factor that can reverse the trend at any time.
Regarding domestic gold prices, as of 11:10 on October 27, SJC gold bar prices were trading around 147.9 - 148.9 million VND/tael (buy - sell).
Bao Tin Minh Chau 9999 gold ring price is trading around 149.5 - 152.5 million VND/tael (buy - sell).
Gold prices are taking a break?
Commenting on gold prices this week, experts said that gold prices cannot increase again in the short term, which is even unpredictable. Michael Brown - Senior Analyst at Pepperstone - expects gold prices to fluctuate in the range of 4,000 4,400 USD/ounce in the short term, with the risk of increasing as global public debt continues to escalate and central banks increase gold purchases.
"The upward trend in the market has not ended, but is only "resting to regain strength". The recent adjustment is the result of a steady, too fast and too strong increase, forcing the market to cool down when the new cash flow is more cautious and long-term investors take advantage of taking profits" - he said.
