Where will the gold price be in the next 5 years?

11/05/2022 06:56 GMT+7

To predict where the gold price will be in the next five years, MKS PAMP (Switzerland) looked at the precious metal’s response to the Fed’s past interest rate hikes. Will a 0.5% increase in interest rates each time to tame inflation or cause a recession? The price of gold depends a lot on whether the Fed raises interest rates quickly or slowly as has happened in the past.

Gold price in the next 5 years will return to 1,300 USD/ounce or increase to 4,000 USD/ounce, depending on the fast or slow tightening of monetary policy of the US Federal Reserve (FED).

According to MKS PAMP, in the event that the Fed raises interest rates slowly (by 0.25% per year), gold can reach $4,000/ounce in the next 5 years (ie, an increase of nearly $2,150/ounce compared to the current time). , equivalent to a conversion price of nearly 111 million VND/tael.

A quick rate hike cycle (above 0.5%) could trigger a sharp sell-off in gold, with prices falling to $1,300 an ounce in five years (well below current levels of $550 an ounce). ), equivalent to the converted price of 36 million VND/tael. A quick rate hike by the Fed will send gold prices 32% lower on average over five years, which is also bad for the stock market.

In addition, the Fed’s choice between a slow or a fast rate hike cycle will depend on the outcome the US central bank wants to achieve. The Fed will only have to choose to tame inflation (slower growth cycles) or kill inflation (faster interest rates).

Regarding the short-term trend of gold, MKS PAMP said, do not expect much in this trend because investors are in “wealth preservation mode” and it is too early to draw any conclusions about the rate of gold. Fed level.

“Gold is now down for three straight weeks, its longest losing streak since December as the bond (and equity) market continues to drive a rally in nominal and real yields. However, the extent of gold’s decline is getting slower and slower. Bond yields are high and gold is likely to fall below $1,850/ounce,” commented MKS PAMP.

In the world market, at 20:30 on May 10 (Vietnam time), the gold price on kitco.com traded at 1,862.60 USD/ounce, up 8.5 USD compared to the closing session. May 9th. The world gold price reacted to the recent actions of the Fed as well as the Fed’s outlook for the next two Open Market Committee (FOMC) meetings. The Fed raised interest rates by half a percentage point at this month’s meeting and indicated that it is likely to continue its trend of 0.5% rate hikes at both the June and July FOMC meetings.

World gold price in the last 24 hours – Source: kitco.com.

This has led to a recent strong rise in yields in US Treasuries, with 10-year Treasury yields trading to as high as 3.2% today ahead of the settlement. decided at 3.039%. Higher yields on US debt have been supportive of the US dollar’s rise in value relative to other currencies, and that has put downward pressure on gold and silver prices.

In the domestic market, at the close of trading session on May 10, the price of SJC gold bar of Saigon Jewelry Company Limited (SJC), decreased by 150,000 VND/tael in both buying and selling directions compared to the closing price. Trading session on May 9, there were 69,450,000 VND/tael bought in and 70,150,000 VND/tael sold.

Phu Quy brand SJC reduced the price of gold bars, with a decrease of 150,000,000 VND/tael in the buying afternoon and 200,000 VND/tael in the selling side compared to the closing session of the previous day, to 69,450,000 VND/tael bought. input and 70,050,000 VND/volume sold.

Meanwhile, DOJI Saigon brand closed the session on May 10, reducing 300,000 VND/tael in the buying direction and 200,000 VND/tael in the selling afternoon compared to the closing session on May 9, currently remaining 69,400,000 VND/wage purchased and VND 70,100,000/quantity sold.

Along with the downward trend of domestic SJC gold price, the price of PNJ jewelry gold also decreased by 100,000 VND/tael in buying and 50,000 VND/tael sold compared to the end of the previous session, to 54,600,000 VND. VND and 55.700.000 VND/tael. Currently, the difference between SJC gold bars and jewelry gold is currently 14,450,000 VND/tael.

According to DDDN