Global gold prices exploded past the $3,400 per ounce mark this morning (May 8), rebounding sharply after a steep overnight drop in U.S. trading, continuing a trend of dramatic swings driven by investor uncertainty and geopolitical tensions.
As of 10:00 AM (Vietnam time), spot gold in Asia was trading at $3,406.20/oz, up $40.10, or nearly 1.2% from the previous New York close, according to data from Kitco. Converted at Vietcombank’s current USD selling rate of VND 26,140, this equates to approximately VND 107.3 million per tael, a sharp increase of VND 1.1 million from the previous morning.
Wide Price Fluctuations Reflect Global Jitters
On Wednesday (May 7) in New York, gold closed at $3,366.10/oz, a drop of $68.40, or nearly 2%, from the prior session. Price swings of $50–100 per ounce within a single session have become common, reflecting deep investor anxiety amid unresolved trade tensions and mixed macroeconomic signals.
Uncertainty Around U.S. Trade and Monetary Policy Weighs on Markets
The dramatic volatility is rooted in growing global unease over U.S. tariff policy. While trade negotiations between the U.S. and key partners, including China, are ongoing, no clear outcomes have emerged. A high-level U.S.–China meeting is scheduled in Geneva this weekend, but analysts remain skeptical that a breakthrough agreement will be reached.
This uncertainty has driven strong safe-haven demand for gold. However, prices tend to pull back on positive economic news or a strengthening dollar. On the contrary, any signals of escalating trade tensions often lead to gold price spikes.
The U.S. Dollar Index, which measures the greenback against six major currencies, rose 0.3% to 99.85 on Wednesday, adding pressure to gold prices.
Fed Holds Rates Steady—Gold Reacts Cautiously
Following its two-day policy meeting, the U.S. Federal Reserve left the benchmark interest rate unchanged at 4.25%–4.5%, as expected. Fed Chair Jerome Powell indicated the central bank will remain in a “wait-and-see” mode until there’s greater clarity on the economic impact of Trump administration policies.
This neutral stance may limit gold’s upside in the near term, as gold—being a non-yielding asset—typically benefits from falling interest rates. Earlier expectations of a Fed rate cut in June had supported gold’s rally in early 2025, but markets now anticipate no rate cuts before July, reducing bullish momentum for the metal.
Gold Remains a Strategic Hedge Despite Short-Term Risks
Despite recent fluctuations, gold has climbed nearly 30% year-to-date, building on a 27% gain in 2024, driven by persistent global risks, central bank buying, and inflation concerns.
Bank of America forecasts that gold could reach $4,000/oz in the second half of this year, citing limited short-term upside but strong long-term potential.
Central Banks—Led by China—Continue to Stockpile Gold
Official data shows that the People’s Bank of China (PBOC) purchased gold for the sixth consecutive month in April, adding 70,000 ounces to its reserves. This trend of sustained gold buying by central banks, particularly from emerging markets like China, remains a key structural driver of gold’s long-term price resilience.
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Source: Vietnam Insider