Brian Jeffrey
Despite rising geopolitical stress, especially in the Middle East, gold prices are surprisingly experiencing a temporary decline. Analysts comment that, although the long-term outlook remains positive, occasional corrections are to be expected.
This week began with gold prices climbing to $3,380 per ounce but quickly fell back, even with escalating tensions between Israel and Iran. By June 23 morning, the spot price was recorded at $3,364.7 per ounce, reflecting a nearly 2% drop for the week. Meanwhile, August 2025 futures on the Comex New York exchange also traded at $3,364 per ounce.
In Vietnam, gold prices slightly dipped as well. SJC gold bars were being sold for 117.7-119.7 million VND per tael (buy-sell), which translates to about $4,625-$4,705 per tael. SJC’s plain gold rings in various weights were offered at 113.7-116.2 million VND/tael ($4,465-$4,565), while Doji’s 9999 gold rings were priced at 114.5-116.5 million VND/tael ($4,495-$4,575).
Typically, periods of geopolitical turmoil drive investors towards gold as a safe asset. Yet, in the midst of global uncertainties, gold has recently retraced. What accounts for this inconsistency?
Nguyen Quang Huy, an economist and the head of the Finance and Banking Faculty at Nguyen Trai University, noted that although gold surpassed $3,400 per ounce last week, it has now seen a slight correction due to various technical and economic influences.
The existing Israel-Iran conflict, combined with U.S. airstrikes, Iran’s closure of the Strait of Hormuz—an essential oil transit pathway—and ongoing conflicts between Russia and Ukraine have all contributed to rising global economic volatility and inflationary pressures.
Such factors have made gold more sought-after by central banks, hedge funds, and institutional investors. However, short-term profit-taking, cautious investor behavior ahead of upcoming U.S. Federal Reserve meetings, and a shift in capital towards energy and defense sectors due to increasing oil prices have stimulated this necessary market correction.
“Pullbacks in the short term are a normal part of a long-term upward trend and shouldn’t be seen as a reversal,” Huy stated.
Financial analyst Phan Dung Khanh added that gold has been trading near historical high levels for the past couple of months. While prices have stabilized, they haven’t drastically dipped. Many bullish factors are already reflected in current prices, which makes gold less appealing for short-term investments relative to other emerging assets.
After experiencing two years of appreciation, gold’s relative allure is waning for some investors, leading to diversification of capital without completely exiting the market.
Huy forecasted that if tensions in the Middle East or Eastern Europe intensify, global gold prices could rise above $3,500 per ounce. Furthermore, if the U.S. Federal Reserve finds it necessary to lower interest rates due to an economic downturn, gold could become an even more attractive alternative to traditional currencies. Central banks are discreetly accumulating gold as part of a broader strategy to reduce reliance on the U.S. dollar.
Looking ahead six months, local gold prices are expected to align with international trends and be shaped by policies from the Vietnamese government and central bank.
To stabilize the market, initiatives will aim to reduce the price gap between domestic and international levels. Creating a national gold trading platform will enhance market transparency, lessen speculation, and align prices with intrinsic values. Additionally, broadening distribution networks and reauthorizing gold imports are on the agenda to balance supply and demand.
Khanh mentioned that domestic gold pricing is tightly linked to global movements. In the past month, with international prices stabilizing, the Vietnamese gold market has remained relatively steady.
Given gold’s status as a globally traded commodity, external influences heavily sway prices across regions. Although it may be less profitable in the near term, gold continues to serve as a long-term safe-haven asset. With ongoing supportive conditions, a significant price drop appears unlikely, concluded Khanh.
