Gold investors in Vietnam urged to stay cautious amid strong market volatility
Given a large gap between domestic and international gold prices, it would be high risks for investors to bet their money on gold at the moment, said an expert.
Vietnam’s gold market has witnessed strong market volatility in the first month of the year, for which experts warned such trend could further persist in February due to global economic-political uncertainties.
|Customers buying gold at Bao Tin Minh Chau gold store in Hanoi. Photo: Pham Hung.|
In the global market, gold prices surged by US$33 to $1,931 per ounce in early 2021, the highest since last November. The price, however, suffered a sharp decline by $20 to $1,848.1 per ounce in late January and $1,840 in early February.
The domestic gold prices, meanwhile, seemed to stay away from the global trend as state-owned Saigon Jewelry Company (SJC), the country’s largest gold and gold jewelry production and distribution company, posted the selling and buying prices in February at VND56.3-56.8 million ($2,457–2,479) per tael, slightly higher than the corresponding prices of VND55.05 -56.67 million ($2,394-2,473) from early 2021. A tael is 37.5 grams or 1.2 ounces.
While the global gold prices are on a declining trend, it is expected to go up in long-term at a time when governments around the world are injecting cash and draft supporting polices to speed up economic recovery process.
Moreover, high demand for gold after the Lunar New Year holidays in Asian countries could further drive prices of this precious metal up.
In a surprise move, India, the second-largest consumer of gold in the world after China, announced its decision to cut half the import duty for gold and silver, saying the move is necessary to curb inflows of illegal supplies and boost domestic consumption.
According a Kitco News outlook survey, 84% of respondents said they see gold over $2,000 an ounce by the end of 2021, while Credit Suisse expected the gold prices to average $2,100.
On February 3, SJC gold prices topped VND57 million (US$2,487) per tael, driving domestic gold prices up to around VND5.3 million ($231.27) per tael, higher than the prices in global market.
With three weeks away from the God of Wealth Day [February 21], the day when people would rush to buy gold expecting this would bring good fortune to their businesses and families in a new year, the gold prices are expected to go up.
Investor Director of Maybank KimEng Vietnam Phan Dung Khanh predicted the gold prices in the God of Wealth Day would rise by 3-5% from previous days.
“Assuming the global gold prices in the God of Wealth Day are around US$1,850 per ounce [or $2,220 per tael], the domestic price should be VND56 million (US$2,436) per tael, but a strong demand could push the prices to VND57.7-58.8 million ($2,517-2,565) per tael,” he noted.
Given a large gap between domestic and international gold prices, banking expert Nguyen Tri Hieu said it would be high risks for investors to bet their money on gold at the moment.
“Gold prices could change its course immediately when bad news turns up,” Mr. Hieu suggested.
In fact, over the last few months, many gold investors have suffered losses of up to hundreds of dollars per tael due to a volatile market, added Mr. Hieu.
Sharing Mr. Hieu’s view, economist Can Van Luc said a new US administration under President Joe Biden with different economic policies could cause a major shuffle in the international gold market.
- Vietnam's positive outlook lures foreign investors back to stock market
- Banking industry urged to complete digital transformation legal framework
- VND remains most stable currency in region: Report
- Big techs pay Vietnam US$20 million in taxes in three-month period
- Vietnam’s consumer demand for gold surges 11%
- Vietnam’s Q3 GDP growth at 10.8%: Standard Chartered
- Hanoi's budget revenue up 25% in January-July period
- Vietnam's corporate bond market estimated at US$11 billion in H1
- Credit demand set to grow in the final half of 2022
- About 60% of Vietnamese adults have bank account: Napas
Vietnam, UN accelerate Sustainable Development Goals in 5-year cooperation
Hanoi selected to support sustainable product value chains
Vietnam is stunning in South Korean artist’s MV
Hanoi verifies promoting Covid-19 vaccination as key task
Hanoi focuses on supporting business recovery: Mayor
Construction of Hanoi’s Ring-road No.4 set to begin next June
Dolphin shows fascinate audiences in Hanoi
Vietnam's investment in education accounts 18% of total state expenditure
People and businesses urged to take part in the digitalization: PM