Vang SJC

Yesterday (26/3) gold rose 0.8% from $ 1,195.05 to $ 1,204.56. Gold set the highest of the day at $ 1,219.82 due to factors listed in previous analyzes. But gold prices have been unable to approach $ 1,222.87 due to positive data about unemployment benefits in the US. According to the US Labor Department, last week, the number of people applying for unemployment benefits was 282,000, lower than expected (291,000) and official data last week (291,000). This suggests that the US labor market is stabilizing, a positive sign for the economy. This has supported the dollar and gold was pulled down.

Currently, gold is falling to $ 1,196.74 at 4:44 pm GMT + 7.

Main scenarios:

According to the World Gold Council (WGC), China will open gold market on July 1/4, allowing more importers to cary gold to the mainland market. According to this organization, China will import 900 tonnes of gold in 2015, up 11% over last year. Gold demand in the 2nd biggest market will support gold prices.

April is approaching, it is time of Akashaya Tritiya festival in India, an occasion when Indians boost buying gold. In addition, the macro economy of India is showing signs of recovery. This will contribute to push gold prices up.

According to director of Morgan Stanley Investment, the possibility of the Fed lowering interest rates before rising is exist. According to him, “Nothing is impossible”. He said this is not the appropriate time to raise interest rates, especially when exports are suffering due to dollar appreciation. If this happens, the dollar will fall and gold will rise.

In addition, the WGC make some comments as follows:

  • The uptrend of the dollar will not last long due to low growth outlook and the Fed’s lowering prospected rate hik (from 1,125% to 0.625%).
  • Gold supply is limited.
  • Fighting in Yemen increases demand for safer assets such as gold
  • Lower interest in worldwide securities drives investors away to other assets, and gold is a good alternative.
  • The growth of global gold market will alleviate the impact of dollar on gold price in the long term.
  • Finally, tonight, the US will release important data of the economy (GDP). This is a key metric gives an overview of the economy most. If it is less than expected (2.4%), dollar drops and gold surgs, likely touches resistance at $ 1,222.87, then breaks and climbs further.


The other scenarios:

Gold prices continued to increase in recent week leading to marked declining demand in Asia. This negatively impacts the gold price.

Other plans of the Indian government to prevent illegal gold trafficking is asking people to buy over 100,000 rupees, from “permanent account” (PAN). The plan will significantly reduce the demand for gold in India, the price of gold will lose a large support.

SPDR Gold Trust fund reserves fell from 743.21 tonnes to 737.24 tonnes, which suggests that investors be selling assets from gold ETFs, so gold could be dragged down.

Finally, the price of gold depends on the GDP data published by the US tonight. If data is more positive than expected (5.4%), indicating that the US economy be developing generally stable. This will be a positive sign for the dollar and gold prices will be pulled down, maybe to the support $ 1,142.78.

Ban Mai