World’s economic risks and political instability make investment in gold a safe channel

VCN - Before the fluctuation of gold price in the recent time, especially in the world’s economic and political situation has a lot of changes, a Customs newspaper reporter has a talk with Dr. Le Xuan Nghia , Member of the National Advisory Council for Monetary Policy , former acting Chairman of the National Financial Supervisory Commission.
worlds economic risks and political instability make investment in gold a safe channel
TS Lê Xuân Nghĩa.

What do you think about gold price in the recent time?

The increase and decrease in the price of gold bar in Vietnam have been strongly affected by the world market. The risks and instability of the economy, politics everywhere make gold an attractive investment channel which meets the criteria of safety and risk prevention.

For example, when the UK agreed to leave the European Union (EU) with 51.9% of the vote, which is the main reason for the gold price skyrocketing. That day, the opening price was at $US1,256 / ounce, then rose to $US 1,360 / ounce in several transactions - the highest price since July 2014. In Europe, the price was around $US 1,310 / ounce. The strong fluctuations in the world market caused the domestic gold price to be forced to increase but also increased the trading band to 700,000 VND / tael.

According to statistics, in 2017, the State banks of countries have been actively buying gold to increase the proportion of gold reserves in the national foreign exchange reserves. Particularly, Russia has bought nearly 93,62 tons from the beginning of the year to May 2017, bringing its total gold reserves to 1,708 tons, ranking seventh among the countries which have the largest gold reserves in the world. By May 2017, China's total gold reserves were 1,842.6 tons, ranking sixth. Germany has brought home 300 tons of gold stored in the Fed's gold warehouse. The United States has the largest The United States has the largest gold reserves in the world with 8,133.5 tons, accounting for 75.1 % of the national foreign exchange reserves. So the US will have a big impact on gold price through the Fed.

Why has the gold price increased and decreased continuously in the recent time, sir?

The increase in gold price in the recent time was due to the over the past few days is due to escalating tensions between the United States and North Korea, which directly affected the world’s gold price in the last weekends because investors bought a lot of gold to prevent the war on the North Korean peninsula.

Secondly, the decrease in the gold price in the recent time was due to increase in USD price against other currencies. In June 2017, the Fed decided to raise the core interest rate by 0.25 from 1.0 to 1.25%. Previously, the Fed has raised interest rates twice in December 2016 and March 2017. This has shown that the Fed will likely continue to raise the core interest for the third time in the near future. In addition, as the gold is priced in USD, the increase in USD price after the FED’s meeting also impose more pressures on the decrease in the price of this precious metal.

What do you think about the gold market from now to the end of 2017?

As the above analysis, in the long term, the State banks of countries will continue to buy gold raise the gold reserves. However, the purchasing of gold of State banks will not impact as strong as the Feds. I should closely monitor all moves of the Fed, it is likely that the Fed will raise interest rates, which will significantly affect the decrease in gold price in 2017.

In addition, it is necessary to closely monitor the political and economic situations of the above countries and closely follow the tendency of gold purchasing for reserves of the State banks predict the fluctuation in the short term.

By Dinh Thien/ Huyen Trang

Related News

Request for price management and stabilization, avoiding unusual fluctuations during Tet 2025

Request for price management and stabilization, avoiding unusual fluctuations during Tet 2025

VCN - Minister of Finance Nguyen Van Thang has just signed and issued Directive No. 05/CT-BTC on strengthening the price management, operation and stabilization during the Lunar New Year 2025.
Green transformation: It

Green transformation: It's time to force businesses to "get involved"

VCN - Implementing ESG (environment, society, corporate governance) and green transformation has become a mandatory requirement for businesses to achieve sustainable development.
Accelerating investment to meet "green" standards

Accelerating investment to meet "green" standards

VCN – Many businesses are implementing large-scale investments in technology, energy transitions, and production processes to meet the increasingly stringent "green" criteria set by the EU market.
Electronics industry overcomes challenges to penetrate deep into global supply chain

Electronics industry overcomes challenges to penetrate deep into global supply chain

VCN - In addition to the opportunities from the investment shift in the electronics industry, Vietnamese enterprises also face many challenges in terms of capital, technology and human resources. Ms. Do Thi Thuy Huong, Executive Committee Member of the Vietnam Electronics Industry Association (VEIA), shared about the future directions for this potential industry.

Latest News

Personal income tax proposed for interest on some bank savings accounts

Personal income tax proposed for interest on some bank savings accounts

Instead of the current personal income tax exemption on interest from all individual bank savings accounts, the proposal would exempt tax only for low amounts of savings.
Banks set for aggressive bond issuance in 2025 to fuel growth

Banks set for aggressive bond issuance in 2025 to fuel growth

With a higher credit growth goal set by the SBV, banks are ramping up their efforts to secure funding through bond issuance.
Central bank cuts interest rate on bills for first time in 2025

Central bank cuts interest rate on bills for first time in 2025

According to data from the financial data provider Wichart, the SBV issued VNĐ19.6 trillion of bills in the past week. The interest rate on the bills decreased by 0.1 percentage point, from 4 per cent to 3.9 per cent on February 14.
Focusing on inspecting inventory of public assets at units with large and complex assets

Focusing on inspecting inventory of public assets at units with large and complex assets

VCN - According to Official Dispatch No. 1456/BTC-QLCS on inspecting the preparation and implementation of the General Inventory of Public Assets recently issued by the Ministry of Finance, the inspection of the inventory of public assets focuses on units with large asset scale and large number of inventory items, complex assets, and slow implementation progress.

More News

The government seeks approval for revised GDP, CPI targets

The government seeks approval for revised GDP, CPI targets

VCN - The Government submitted to the National Assembly for consideration and comments on adjusting the target for the growth rate of gross domestic product (GDP) to 8% or more; the average growth rate of the consumer price index (CPI) to about 4.5-5%.
Fiscal, monetary policies support demand stimulation, price stabilisation

Fiscal, monetary policies support demand stimulation, price stabilisation

These efforts, in conjunction with the implementation of monetary policies and other macroeconomic policies, aim to solve difficulties for businesses and the public, stabilise the macroeconomy, control inflation, ensure the balance of the economy, promote economic growth, and secure social welfare and people’s livelihoods.
Vietnam secures VND 157 billion from state enterprise divestment in 2024

Vietnam secures VND 157 billion from state enterprise divestment in 2024

VCN - The Ministry of Finance reported that in 2024, the divestment of state capital in 5 enterprises (F1) generated VND 157 billion from an initial value of VND 145 billion
Vietnam gears up for potential inflation impact in 2025

Vietnam gears up for potential inflation impact in 2025

VCN - For sound price management and inflation control, Deputy Prime Minister Ho Duc Phoc directed officials to vigilantly track both domestic and international market dynamics. The goal is to proactively develop flexible strategies and solutions, enabling a swift response to any emerging challenges.
VN’s credit conditions in 2025 expected to be stable

VN’s credit conditions in 2025 expected to be stable

The credit conditions for Việt Nam will stabilise in 2025, after improving substantially over the past year, the rating agency VIS is forcasts.
State revenue in first month of the year equal to 14% of the estimate

State revenue in first month of the year equal to 14% of the estimate

VCN - According to the Ministry of Finance, in January - the first month of 2025, the total state budget revenue is estimated at VND275.9 trillion, equal to 14% of the estimate; meanwhile, the total state budget expenditure is estimated at VND134.4 trillion.
Securities 2025 expects a breakthrough in scale and quality

Securities 2025 expects a breakthrough in scale and quality

VCN – The positive factors inherent in the macro economy and the Vietnamese stock market will continue to create the foundation for the market to maintain stability, good liquidity, and growth in both scale and quality in the new year of At Ty 2025, Chairwoman of the State Securities Commission Vu Thi Chan Phuong said.
Cash reserves in stock accounts at six-quarter low amid margin rise

Cash reserves in stock accounts at six-quarter low amid margin rise

These funds are readily available in investor accounts, but remained undeployed as of the year-end.
Five solutions for developing stock market in 2025

Five solutions for developing stock market in 2025

VCN - On February 5, 2025, at the Gong-beating ceremony to open the stock trading at the Ho Chi Minh City Stock Exchange (HOSE), Deputy Minister of Finance Nguyen Duc Chi introduced five solutions for comprehensive development of the stock market.
Read More

Your care

Latest Most read
Personal income tax proposed for interest on some bank savings accounts

Personal income tax proposed for interest on some bank savings accounts

Instead of the current personal income tax exemption on interest from all individual bank savings accounts, the proposal would exempt tax only for low amounts of savings.
Banks set for aggressive bond issuance in 2025 to fuel growth

Banks set for aggressive bond issuance in 2025 to fuel growth

With a higher credit growth goal set by the SBV, banks are ramping up their efforts to secure funding through bond issuance.
Central bank cuts interest rate on bills for first time in 2025

Central bank cuts interest rate on bills for first time in 2025

According to data from the financial data provider Wichart, the SBV issued VNĐ19.6 trillion of bills in the past week. The interest rate on the bills decreased by 0.1 percentage point, from 4 per cent to 3.9 per cent on February 14.
Focusing on inspecting inventory of public assets at units with large and complex assets

Focusing on inspecting inventory of public assets at units with large and complex assets

VCN - According to Official Dispatch No. 1456/BTC-QLCS on inspecting the preparation and implementation of the General Inventory of Public Assets recently issued by the Ministry of Finance, the inspection of the inventory of public assets focuses on units
The government seeks approval for revised GDP, CPI targets

The government seeks approval for revised GDP, CPI targets

The Government submitted to the National Assembly for consideration and comments on adjusting the target for the growth rate of gross domestic product (GDP) to 8% or more
Mobile Version