Domestic gold prices hit historic fall on global market slump

Specifically, DOJI Group listed its gold prices at VND60 million per tael for the buying rate and VND62.5 million per tael for the selling rate, representing falls of VND3.5 million and VND3 million per tael, respectively, compared to transactions on July 18.

Elsewhere, SJC gold at the Saigon Jewelry Company was traded at VND61.5 million per tael for buying and VND64 million per tael for selling, down VND2 million and VND0.5 million per tael respectively in comparison to previous transactions.

Most notably, SJC gold prices recorded a historic one-day drop on July 18, with a fall of VND5 million to hover at around VND63.5 - 64.5 million per tael.

Experts attributed this sharp decline to the current global downturn, with gold prices worldwide fluctuating at around US$1,707 per ounce, recording the lowest level over a year.

Furthermore, gold prices dipped amid sharp gains in the US dollar after the US Federal Reserve (Fed) decided to hike interest rates in an effort to tackle inflation, a move which has dimmed the allure of the haven metal.

Gold prices were down on dollar appreciation, with investors selling assets, including gold, to buy the greenback, said Tran Thanh Hai, chairman of SJC Phu Tho.

Analysts believe that despite gold prices crashing to below the US$1,700 per ounce mark, there has still been no major speculative move in the market.

Moreover, Fed officials have signaled over the weekend that they are likely to raise interest rates to 75 basis-points at their July 26 - 27 meeting.

However, a recent high inflation rate may prompt the Fed to make larger rises than predicted later in the year.

Meanwhile, the European Central Bank (ECB) is expected to raise interest rates by 25 basis points at its monetary policy meeting later this week.

Experts therefore advised investors not to risk buying gold at this time as gold prices are anticipated to become far more volatile moving forward.