What made gold increase 48% in just 9 months?

The uptrend moves into a new phase

With a 12% increase in September - the highest in decades, the gold market recorded quite strong profit-taking activities. Thereby, only restraining the increase, keeping the gold price below 3,900 USD/ounce as of the end of the trading session on October 3 and not recording any significant decline.

Spot gold has risen more than 48% from $2,625 an ounce at the start of the year, its biggest annual gain since 1979.

Most of the factors supporting the gold price increase are still present. That is, a weakening USD, the US Federal Reserve (Fed) may cut interest rates twice in the rest of 2025 and continue to loosen monetary policy next year; geopolitical tensions show no signs of cooling down in Ukraine, the Middle East, Europe...

Now, the market faces a new factor supporting gold: the possibility of a US government shutdown.

Last night, the US Senate once again failed to pass opposition budget bills aimed at averting a three-day US government shutdown.

The failure of Congress to pass a new budget bill has been going on for a few days and has not yet had a major impact on the economy . But the longer this political deadlock lasts, the greater the ultimate impact will be. According to initial estimates, the US economy could lose between $7 billion and $15 billion per week of shutdown.

World gold price increased sharply to a new peak, SJC reached 138 million VND/tael. Photo: MH

In September, the world witnessed a rare shift from the US dollar to gold, which JPMorgan called a “debasement trade” (the greenback). Many retail customers are starting to lose confidence in the US dollar, worried about long-term inflation and the devaluation of debt due to persistently high government deficits across major economies.

Over the past three years, central banks have been fueling this shift, diversifying portfolios away from the US dollar and into gold.

However, JPMorgan said the gold rally has entered a new phase as retail investors enter the market. Demand for gold ETFs saw a record increase last month.

On Kitco, Aakash Doshi - Head of Gold Strategy at State Street Investment Management, said that in September, SPDR Gold Shares (NYSE: GLD) - the world's largest gold ETF, increased its gold holdings to 35.2 tons, with a record 18.9 tons recorded on September 19 - the highest ever.

However, global gold holdings in gold ETFs remain below the record levels set in 2020.

According to a report by the precious metals market analysis company Heraeus, China and India continue to boost gold imports amid rising prices. In August, China imported 100 tons of gold for trade, investment and industrial production...

Meanwhile, according to the World Gold Council (WGC), the People's Bank of China (PBoC) imported an additional 2 tons of gold for reserve purposes, bringing its total holdings to more than 2,300 tons, accounting for 7% of the country's total reserve assets.

The WGC report released on October 3 shows that central banks of many countries increased their gold purchases in August, with the rise of some faces such as the Central Bank of Kazakhstan (8 tons), Bulgaria (2 tons), Turkey (2 tons), Uzbekistan (2 tons), Ghana (2 tons) and El Salvador... On the other hand, Russia sold 3 tons, Indonesia sold 2 tons. In total, global central banks net bought an additional 15 tons of gold in August to put into reserves.

Gold price will soon reach 4,000 USD/ounce

Major investors on Wall Street do not doubt gold's rally to $4,000, while retail investors on Main Street are more optimistic about gold next week as the U.S. government remains shut, according to a Kitco survey.

The US government shutdown, speculation about Europe reusing Russian gold reserves and conflicts in Europe are supporting sentiment after gold has risen for seven consecutive weeks, said Marc Chandler, CEO of Bannockburn Global Forex. $4,000 an ounce is not far away.

According to Kitco's survey, 92% of experts on Wall Street predict gold prices will increase in the week of October 6-10, no one predicts a decrease. Meanwhile, on Main Street, 74% of retail investors predict gold prices will increase, 18% predict a decrease.

Major banks, including Deutsche Bank and Goldman Sachs, believe gold prices will soon rise to $4,000, or even $5,000 an ounce.

Silver prices also rose sharply during the week and are now approaching the $48/ounce mark, just $2 away from the all-time high.

Domestically, gold prices are hovering around record highs. Specifically, in the morning trading session of October 4, the price of 9999 gold bars at SJC was listed at 136.6-138.6 million VND/tael (buy-sell), a sharp increase of nearly 1 million VND, reaching nearly 139 million VND/tael.

By the end of the afternoon of October 3, SJC announced the price of 1-5 ring gold at only 132.3-135 million VND/tael (buy - sell), an increase of 800,000 VND/tael. Doji announced the price of 1-5 ring gold at only 132.6-135.6 million VND/tael (buy - sell), an increase of 600,000 VND/tael - a historical high.

The Ministry of Finance said on October 3 that it had submitted to the Government a plan to levy personal income tax on gold bar transfers to increase transparency and limit gold speculation. In addition, personal income tax will not be applied to raw gold and gold jewelry.

Vietnamnet.vn

Source: https://vietnamnet.vn/dieu-gi-khien-vang-tang-48-chi-trong-9-thang-2449063.html