Although global geopolitical tensions are escalating, particularly in the Middle East, gold prices are experiencing a surprising short-term decline. Experts explain that while the overall trend remains bullish, temporary corrections are inevitable.

War intensifies, but gold prices dip-why?

At the start of the week, global gold prices surged to $3,380 per ounce but soon reversed, even amid growing conflict between Israel and Iran. As of the morning of June 23, the spot price of gold stood at $3,364.7 per ounce, down nearly 2% for the week. August 2025 futures contracts on the Comex New York exchange also traded at $3,364 per ounce.

In Vietnam, gold prices also saw slight declines. SJC gold bars were trading at 117.7-119.7 million VND per tael (buy-sell), equivalent to approximately $4,625-$4,705 per tael. SJC’s 1-5 chi plain gold rings were listed at 113.7-116.2 million VND/tael ($4,465-$4,565). Doji’s 9999 gold rings were priced at 114.5-116.5 million VND/tael ($4,495-$4,575).

Geopolitical instability usually drives investors toward gold as a safe haven. Yet, despite heightened global risks, gold has recently slipped. What’s behind this contradiction?

Nguyen Quang Huy, an economist and CEO of the Finance and Banking Faculty at Nguyen Trai University, explained that although gold exceeded $3,400 per ounce last week, it has since corrected slightly due to technical and macroeconomic factors.

Geopolitical, monetary, and market psychology at play

The ongoing Israel-Iran conflict, U.S. airstrikes, Iran’s closure of the Strait of Hormuz-one of the world’s most critical oil transport routes-and continued Russia-Ukraine warfare have all contributed to global economic uncertainty and inflationary pressure.

These developments have made gold more appealing to central banks, hedge funds, and institutional investors. Yet short-term profit-taking, investor caution ahead of U.S. Federal Reserve meetings, and capital flows shifting to energy and defense assets amid rising oil prices have prompted a necessary correction.

“Short-term pullbacks are healthy within a long-term bullish trend and shouldn’t be mistaken for a reversal,” Huy said.

Meanwhile, financial expert Phan Dung Khanh noted that gold has hovered around historic highs for the past two months. Although prices have stagnated, they haven’t significantly declined. Most bullish drivers are already priced in, making gold less attractive in terms of short-term profit compared to emerging asset classes.

After two years of gains, gold's relative appeal is diminishing for some investors, prompting capital to diversify without fully exiting the market.

What about gold prices in Vietnam?

Huy predicted that if conflicts in the Middle East or Eastern Europe escalate, global gold prices could surpass $3,500 per ounce. He added that should the U.S. Federal Reserve be forced to cut interest rates due to a recession, gold would become even more appealing as an alternative to fiat currency. Central banks worldwide are quietly stockpiling gold as part of a broader de-dollarization strategy.

Over the next six months, domestic gold prices will likely mirror international trends and be influenced by Vietnamese government and central bank policies.

To stabilize the market, efforts will focus on narrowing the gap between domestic and global prices. Establishing a national gold trading platform will increase market transparency, curb speculation, and guide prices toward intrinsic value. Expanded distribution channels and reauthorizing gold imports are also on the table to balance supply and demand.

Khanh noted that domestic gold prices are closely tied to global trends. Over the past month, as international prices stabilized, Vietnam’s gold market has remained relatively calm.

Given gold’s nature as a globally traded asset, external factors heavily influence prices across borders. Though less profitable in the short term, gold remains a safe-haven asset long-term. With current support factors, a sharp price drop is unlikely, Khanh concluded.

Nguyen Le