World Gold Council talks about the possibility of a sharp drop in gold prices in the coming time

Some say that the tariff issue between the US and other countries has basically been settled and cooled down, and central banks have run out of room to reduce interest rates. Therefore, by the end of the year, the world gold price could fall sharply to $3,000/ounce.

Commenting on this assessment, Shaokai Fan, Director of Asia- Pacific (excluding China) and Director of Global Central Banks at the World Gold Council, said that the Trump administration is one of the most unpredictable administrations ever in terms of policy and policy impact. Therefore, there are still many uncertainties in terms of trade agreements.

The world is currently focused on the trade tensions between the US and India with tariffs much higher than initially predicted. More importantly, the world is waiting for the final outcome of the trade agreement between the US and China. There are many aspects of the US-China relationship that will impact the gold market in the coming time. Therefore, trade is still unclear and there are still factors of uncertainty in the coming time.

In addition, according to Mr. Shaokai Fan, central banks still have room to cut interest rates. US President Donald Trump has repeatedly asked the US Federal Reserve (Fed) to cut interest rates. "Therefore, cutting interest rates is still a positive factor for gold, not a disadvantage in the near future," Mr. Shaokai Fan affirmed.

Investors continue to be interested in gold in the coming time.

According to the World Gold Council's Gold Demand Trends Report Q2/2025, total global gold demand in the last quarter reached 1,249 tons, up 3% compared to the same period in 2024.

Mr. Shaokai Fan also said that central bank buying continued to support gold prices, with 166 tonnes added in the second quarter, with China ranking fourth.

Vietnam, however, is an exception. The devaluation of the local currency coupled with the rising USD has caused domestic gold prices to skyrocket to record levels. This has created an affordability barrier, causing gold demand in the second quarter to fall 20% year-on-year to 9 tonnes. However, looking at the long-term trend, demand remains high, and the total value of gold invested in Vietnam actually increased by 12% in USD terms year-on-year to $997 million. Demand for gold jewelry in Vietnam also fell 20% year-on-year in the second quarter and 29% compared to the first quarter.

Mr. Shaokai Fan believes that investors will continue to be interested in gold in the coming time.

According to a survey by the World Gold Council, 95% of central bank reserve managers believe the trend of increasing gold reserves will continue over the next 12 months. 43% of central banks surveyed said they will continue to buy at record levels over the next 12 months. However, the short-term outlook is uncertain.

The future development of the gold market depends largely on how India and China invest in gold bars and coins, how the trade tensions are resolved, and the final outcome of the trade negotiations between the US and China. The surprise factor is that the US tariffs imposed on India are higher than expected. This will boost the demand for gold investment in India. However, further developments are still needed.

Central bank demand remains strong, but will not reach the record levels of the past three years. A survey of global central bank purchases shows that buying is still high, but given the rising gold price, how much investors will buy remains to be seen.

Earlier, Ms. Louise Street, Senior Market Analyst at the World Gold Council, commented: In the first half of 2025, gold prices recorded a strong increase of up to 26% in USD terms. With such a strong start, gold prices are likely to fluctuate within a relatively narrow range in the second half of 2025. However, the macroeconomic environment remains very unpredictable, which could continue to favor the upward momentum of gold prices. Any significant deterioration in the global economic or geopolitical situation could increase the appeal of gold as a safe-haven asset, thereby pushing gold prices higher.

Source: https://nld.com.vn/hoi-dong-vang-the-gioi-noi-ve-kha-nang-gia-vang-giam-manh-thoi-gian-toi-19625080717234004.htm