The price of gold has been on a remarkable rally, reaching new record highs this year, with the latest peak hitting $3,167.84 per ounce after the announcement of reciprocal tariffs by U.S. President Donald Trump. The gold market has experienced a surge in demand, driven by geopolitical tensions, economic uncertainty, and a growing fear of a trade war.
As of April 3, 2025, the gold price has now increased by nearly 20% since the beginning of the year, continuing the momentum from last year when it rose by 27%. This surge reflects a broader trend where gold is seen as a safe haven amid uncertain economic conditions.
On Monday, March 31, 2025, the gold price reached a record high of $3,148, and just days later, it surpassed that mark, marking a significant milestone for the precious metal. The announcement of tariffs, which will impose a flat rate of 10% on most imports into the U.S., has added to the volatility in the markets. Trump indicated that countries with significant trade deficits may face even higher tariffs, with Chinese goods facing tariffs of up to 34% and those from the European Union at 20%.
Market analysts have noted that the uncertainty surrounding the tariffs has kept gold prices elevated. As Michael Hsueh, an analyst at Deutsche Bank, pointed out, "The demand forces that have led to an above-average appreciation of gold are likely to persist." This sentiment is echoed by many investors who are flocking to gold as a hedge against potential economic fallout from the tariffs.
The recent surge in gold prices is not just a result of the tariff announcement. The market has also seen strong buying from central banks and increased interest in gold ETFs in developed markets. Additionally, there is potential for significant allocations of gold by Chinese insurance companies, further supporting the bullish outlook on gold.
However, the rapid increase in gold prices has raised concerns about a potential correction. Some technical indicators suggest that the gold market may be overbought, with the Relative Strength Index (RSI) showing signs of being at extreme levels. As the price of gold approached its record high, many traders began to wonder if the market was ready for a pullback.
In the domestic market, particularly in Vietnam, gold prices have also surged, reflecting global trends. For instance, at Bao Tin Minh Chau, the price of gold rings was reported at 100-102.9 million VND per Tael (approximately $4,200-$4,300), marking an increase of 1.2 million VND per Tael for purchases and 1.1 million VND for sales compared to the previous day. Other companies like DOJI and Phu Quy Gold Investment also reported similar increases in their gold prices.
Despite the rise in prices, experts caution domestic gold buyers to be wary of the current market conditions. The gap between buying and selling prices has widened significantly, creating risks for those looking to invest in gold. The domestic price of gold is currently almost 5 million VND per Tael higher than the global price, which was around $3,165 per ounce on the morning of April 3, 2025.
Looking ahead, the market is closely monitoring further economic data, particularly regarding U.S. employment figures, which could influence the Federal Reserve's interest rate decisions later in the year. The anticipation of a potential interest rate cut by the Fed in the second half of 2025 could further fuel the gold rally.
The ongoing geopolitical tensions and the uncertainty surrounding trade relations will likely keep gold prices elevated in the near term. Investors are advised to stay informed and cautious as the market navigates these turbulent waters.
In summary, the gold price has reached unprecedented heights amid fears of an escalating trade war and economic instability. With the announcement of reciprocal tariffs by President Trump, the market has reacted strongly, pushing gold prices to new records. As investors seek refuge in gold, the dynamics of supply and demand will continue to shape the market in the coming months.
