Will gold prices continue their uptrend?

This week, gold prices in the global market have steadily increased from USD 2,637 per oz to USD 2,723 per oz, closing the week at USD 2,721 per oz.

In the Vietnamese gold market, the price of SJC gold bars, as stated by Bao Tin Minh Chau Ltd, has climbed to VND 86 million per tael, while gold rings have risen to VND 85.68 million per tael.

According to market views, gold prices have risen in recent days due to a variety of supportive reasons.

First, the Federal Reserve and many other central banks anticipated continuing to cut interest rates in the following months. This will strengthen gold's position as a safe haven.

Second, public debt levels throughout the world are worse than expected, and government actions will be insufficient, according to experts at the International Monetary Fund (IMF). "It is predicted to surpass $100 trillion, or almost 93% of global GDP, by the end of this year and will approach 100% of GDP by 2030," said IMF.

Third, while central banks continue to walk a delicate line between boosting economic growth and keeping inflation under control to avoid stagflation, global geopolitical tensions appear to be rising by the day, despite declining economic conditions. This includes significant confrontations between Ukraine and Russia, the increasing danger of Russia vs NATO, Israel vs Palestine, Israel and the United States against Iran, and North Korea vs South Korea, among others.

Fourth, when Russia was excluded from the SWIFT international currency system on March 1, 2022, BRICS central banks increased their gold holdings at a record speed, indicating that they are preparing for a global monetary reset. When Russia holds the BRICS conference next week, Moscow hopes to persuade the nations to develop an alternative platform for international payments that is not subject to Western sanctions. Moscow is citing the October 22-24 conference in Kazan as evidence that Western efforts to isolate Russia have failed.

Fifth, several central banks have acquired gold to increase their gold reserves and minimize their reliance on the US dollar.

Many experts believe gold prices will continue to rise but will face profit-taking pressure if FOMO sentiment and geopolitical tensions subside.

According to Naeem Aslam, Chief Investment Officer of Zaye Capital Markets, rising FOMO mentality in the gold market may indicate frothiness.

"While momentum is still with the bulls, this fast advance is sentiment-driven, and any hawkish move from the Fed or profit-taking might precipitate a correction," Naeem Aslam said, adding that the higher it goes without a pullback, the more fragile it gets. Cautious optimism is advised, since overbought situations may swiftly reverse.

With no meaningful economic data due next week, analysts anticipate the gold market to remain focused on larger themes, particularly geopolitical anxiety.

The BRICS members will have their annual conference in Russia next week. According to sources, the formidable economic bloc, which counterbalances Western alliances, would explore developing a new payment system based on a network of commercial banks connected via BRICS central banks. The objective is to weaken the US dollar's status as the world's reserve currency.