Gold sell-off, gold price fell due to “excitement”, will it rise again soon?

The drop due to “excitement” will immediately increase again

Speaking to PV VietNamNet about the fall in gold prices following Donald Trump’s re-election as US president, economist Tran Duy Phuong said: “The drop in prices is only temporary , there is nothing surprising. » Because the world gold price declined when the results of the US presidential election “became commonplace”.

He pointed out that consecutive US presidential elections over the past 20 years have all happened this way. A few months before the election, global gold prices maintained a slight rise, but this year they have risen even more sharply. When the election results were announced, gold prices immediately fell. The period of falling gold prices typically lasts 1-2 months, with the total decline in gold prices after each previous election ranging from $100-$250/ounce.

“When the results of the US presidential election are announced, during the power transition period, gold investors will take profits,” Mr Phuong said. After that, they will consider whether the new president’s policy direction is beneficial or detrimental to gold. This is the reason why global gold prices fall several times after the elections.

Gold prices fell after the results of the US presidential election. Photo: Minh Hien

Given that global gold prices have risen sharply this year, he predicts that this time around they will likely fall below the threshold of 2.600 USD/ounce. As for the medium and long term, gold prices will definitely rise.

Expert Tran Duy Phuong believes that under Donald Trump’s presidency, gold prices will rise significantly because his policies will bring many favorable factors to the precious metal.

For example, in March and April of this year, Mr. Donald Trump constantly spoke about the need for the Fed to cut interest rates, even stating: “If I win the election, I will not reappoint the chairman of the Fed, Jerome Powell. From this, it can be argued that the era of Donald Trump is one of a weak dollar.

Along with this, Donald Trump often taxes countries’ goods, which will lead to retaliation and a trade war may break out. This will also support rising gold prices. However, after this strong downward adjustment, the price of gold could rise up to 2.900 USD/ounce but would hardly exceed the threshold of 3.000 USD/ounce.

Professor Dinh Trong Thinh admitted that this drop in the price of gold was due to “excitement” when Donald Trump announced his victory in the US presidential election, but it is very difficult to bring it back to the threshold of 2,300 2.400-2.400 USD/ounce.

He said gold prices will rebound. Because Donald Trump still focuses on economic development, often calling for interest rate cuts. In fact, recently, gold prices have increased due to the weakening of the US dollar and the Fed’s interest rate cut, which has pushed gold prices higher.

Economic expert Dinh Tuan Minh also said that in the long term, the development of the gold market depends on many other factors that influence and influence. That is, the price of this precious metal will depend on practical policies when Donald Trump is President of the United States. Additionally, gold prices rise or fall depending on the actions of other countries as well as the global economy.

Unstable effects occur in gold stores

Yesterday, November 7, major gold brands like SJC sold massively, without quantity limits, on the day gold prices fell, according to expert Tran Duy Phuong, because many people sold gold, few people bought it.

“Today, out of 10 people who came to the gold store, there were 9 selling, which makes the market supply very large and the quantity of gold remaining is quite large. Even the gold shops don’t have enough money to pay. Many gold shops promise their customers that they will sell today and come back in 2-3 days to collect the money,” he said.

Many people sell gold on the day the gold price “free falls”. Photo: Tien Anh

For example, at Saigon Jewelry Company Limited (SJC) in Ho Chi Minh City on November 7, many people came to sell gold. Therefore, the price of gold is often adjusted. Early in the morning, the buying – selling price was 11-85 million VND/tael, by the end of the afternoon, it was adjusted to 87.5-81 million VND/tael in the afternoon. noon purchase – sale. The growing range of buying and selling prices for gold shows that the market is unstable.

“Those who sell today find themselves in two situations: selling to take profits at all costs and selling to reduce losses,” he stressed.

As a result, most gold holders have the mentality that gold prices are plummeting and are afraid of losing all their profits, so they rush to sell their gold; And those who missed the “peak” of 89-90 million VND/tael fear that the price will fall to more than 70 million VND and sell quickly to “cut their losses”. Therefore, a one-sided situation arises, people just sell, creating an unstable effect of silver scarcity and stagnant gold supply.

“Our people are often led by a mob mentality. When the price is high, I see a lot of people buying and I also buy and vice versa,” this expert emphasized. At this moment, he said, people should calm down, if this is not really necessary, wait for the price to rise then sell gold Because, at a time when gold is being sold massively, the price will definitely not be good, especially for those who bought gold. recently, selling gold now will result in a loss, or the profit margin will not be big.

“Remember, the price of gold always increases over time. The drop in gold price today is only temporary, maybe next month or after Tet the price will increase. Avoid buying and selling according to trends,” Mr. Phuong further stressed.

For those interested in purchasing gold, the expert noted that they can consider buying immediately or wait 1-2 weeks to get a better price. Because gold prices always have upward and downward adjustments, but the long-term trend is upward.