According to the latest assessment from investment company Fidelity ( Canada), world gold prices may reach the 4,000 USD mark by the end of this year when the US Federal Reserve (Fed) begins its interest rate cut cycle and the USD continues to weaken.
With the world gold price today at 3,361.5 USD/ounce, the 4,000 USD mark is equivalent to an increase of nearly 20%. With domestic gold prices, at the end of the trading session of the week, Saigon Jewelry Company SJC listed the price of SJC gold at 121.5-123.5 million VND/tael (buy in - sell out).
Ian Samson, portfolio manager at Fidelity, said the company remains bullish on gold, with some funds even increasing their holdings as gold prices edited slightly from the historical peak of $3,500/ounce recorded at the end of April.
We see the Feds monetary policy path as becoming more dovish, and thats why were increasing the share of gold, Samson said.
Since the beginning of the year, gold has been one of the most profitable assets, with an increase of more than 27%. The main driver for this increase comes from geopolitical and economic instability due to US President Donald Trump's trade policies, especially changes in the global trade structure and tariff policies, causing investors to seek safer shelters.
However, after reaching a historical peak in April, gold prices have adjusted and fluctuated within a narrow range for the past few weeks, in the context of the progress of US tax negotiations, temporarily easing concerns about the worst scenario for the global economy.
The end-of-the-line scenario that many people imagined at the beginning of the year may not happen, but the reality is that the US is imposing a 15% tax on about 11% of the total economic scale - that is, the amount of imports - Mr. Samson analyzed. That will definitely reduce economic growth.
Gold price forecast for August is quite cautious. Interest rates are the first factor to monitor. The Fed's interest rate keeping unchanged until the mid-September meeting leaves the market with little great incentive to push gold prices up or down. At the present time - with interest rates standing still - gold prices are likely to still rotate around the 3,300 USD/ounce mark.
The second factor is inflation. The current inflation rate detected in the US is 2.7%, still higher than the 2% target set by the Fed. The upcoming inflation data on August 12 could be an important indicator. If inflation rises again, gold may immediately increase in price, but if it remains stable or decreases slightly, the impact on the gold market will not be large.
Finally, the investment psychology factor. In the context of the US stock market recovering quite well after a period of strong fluctuations at the beginning of the year, the question is whether the need to diversify portfolios - which was once the driving force for gold prices to increase - will continue?
Not only Fidelity, major organizations also predict gold prices to exceed $4,000. Goldman Sachs, one of the world's largest investment banks, has repeatedly proposed a scenario where gold prices will surpass the $4,000/ounce mark in the coming quarters.
On the contrary, Citigroup is more cautious, saying that gold prices may correct as the USD remains relatively strong, and the "fear" mentality in the market is cooling down.
