Gold prices surged as the US dollar weakened, defying analysts’ predictions of a stagnant short-term outlook for the precious metal.
As of 8:40 am Vietnam time, the spot gold price in the Asian market was at $3,307.70 per ounce, up $17.40 from last week’s close in New York, a rise of 0.53%. At this level, the price translates to nearly VND 104.5 million per tael, based on Vietcombank’s selling exchange rate.
Earlier, gold prices had spiked to nearly $3,327 per ounce, up by almost $40 from the previous week’s close.
Vietcombank’s website quoted the dollar exchange rate at VND 25,820 (buying rate) and VND 26,210 (selling rate) at the start of the morning, a VND 10 increase on both rates from last week’s close.
Gold prices had dropped by nearly 2% last week, falling below the $3,300 per ounce mark due to a recovering dollar and an unexpected court ruling blocking Trump’s tariff plans. However, investment demand for gold remains robust, as evidenced by the world’s largest gold ETF, SPDR Gold Trust, which saw net purchases of nearly 8 tons of gold last week.
In an interview with Kitco News, several analysts attributed the long-term supportive factors for gold but acknowledged the short-term tug-of-war that is dampening gold’s momentum at present.
High volatility characterized gold prices in May, with a trading range of $324.90 per ounce. While this range has narrowed from April’s record-breaking $539.50, it still far exceeds the 20-year monthly average of about $89 per ounce.
Chantelle Schieven, Head of Research at Capitalight Research, forecasts that gold prices will remain range-bound throughout the summer as investors await clarity on the impact of the ongoing trade war on the US and global economies.
“Gold prices will end the year higher, but for now, the market is in a tug-of-war. It will take 6 to 8 months before we see the full impact of all of Trump’s policies on gold prices and the implications of these policies for the economy,” she said.
Eugenia Mykuliak, founder and CEO of B2PRIME Group, emphasized that the nearly 60% rise in gold prices since the beginning of last year is a result of a combination of macroeconomic and geopolitical factors.
“A key factor is the uncertainty around inflation and monetary policy. Inflation in the US did ease in Q1, but trade policy concerns, tariffs, and fiscal health worries are stoking fears of stagflation,” he said.
The expert stated that he is closely monitoring US inflation data to gauge gold’s prospects. “In the short term, if the CPI data to be released on June 11 surprises to the upside or geopolitical tensions escalate, gold could rally to $3,400 per ounce and even test the psychological level of $3,500 per ounce,” Mr. Mykuliak said.
“Conversely, if the Fed maintains a hawkish tone on interest rates and US macroeconomic data remains robust, gold prices could dip below $3,300 per ounce. The key support level currently stands at $3,215 per ounce,” he added.
The US dollar started the week on a weaker note. At nearly 9 am Vietnam time, the Dollar Index was down 0.17% at 99.16 points, according to MarketWatch data. While the index has recovered by about 0.7% over the past month, it is still down nearly 8.6% year-to-date.
This week, gold investors will focus on the legal battle surrounding tariffs and US macroeconomic data. The most anticipated data will be the non-farm payrolls report for May, which is expected to be released by the US Department of Labor on Friday.
