The international gold prices have risen sharply, exceeding the important psychological threshold of 2,000 USD/oz. On August 5, 2020, at a certain point, the international gold price rose to a record high of 2,039 USD/oz, the highest level in history. The main reason is due to the increasing demand for investment in gold as a safe asset in the current period.
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Governments and central banks have in turn introduced economic stimulus packages to limit the negative impacts of the Covid-19 pandemic on the economy; especially in the US, when the Democratic Party leaders have supported the Republican Party’s proposal on a 1 trillion USD bailout package. Inflation expectations are rising globally and the 10-year US government bond yield has dropped to negative 1.06%. In addition, trade tensions between major countries are also another cause for gold price increases.
In the domestic gold market, the prices of SJC gold bullions have increased in line with the international gold prices. At some moments on August 5, 2020, the selling price of SJC gold bullions was raised to a record level of VND 59 million per tael, the highest level in history. The domestic gold prices have been on an upward trend in line with the increases of the international gold prices. However, unlike the past when people often rushed to buy gold when the prices increased, now there has been no such a rush to buy gold. The situation of buying and selling gold bullions has been quite quiet, the gold buying and selling turnovers have decreased by about 30% compared to the same period last year. The prices of raw gold and some gold bullions of brands other than SJC gold have remained at a level lower than the converted international gold prices.
In the future, the international gold prices may fluctuate unpredictably, mainly depending on the complicated developments of the Covid-19 pandemic worldwide, as well as the geopolitical situations in the world.
The State Bank of Vietnam will continue to closely monitor the developments of gold prices in the market; and if there are any irregular developments, the State Bank of Vietnam will take action to intervene and ensure sufficient resources to stabilize the market.
VA