Golden ‘dance’ repeats?

The gold market is gloomy

In the context of the Russia-Ukraine conflict, the risk of inflation around the world flares up again, investors look to gold as a safe haven. The increased demand caused the world gold price to skyrocket. At that moment, the world gold price “danced”, to the highest level in history with 74.4 million VND/tael (at the trading session on March 8). The domestic gold price was sometimes 20 million dong/tael higher than the world gold price.

After the galloping increase in price, the gold market slowed down and gradually decreased when the war between Russia and Ukraine showed signs of cooling down, and the cease-fire negotiations began to show signs of improvement. Within 4 days, the world gold price fell to 1,900 USD/ounce. The domestic gold price plunged by nearly 8 million dong/tael. After plunging, the price of gold fluctuated from 67-69 million VND/tael (buy in – sell out).

In the past 5 years, the domestic gold market has experienced two price “fevers”. The first fever caused the domestic gold price to skyrocket to VND60 million/tael in early 2020 when the COVID-19 epidemic first appeared in Vietnam. Worried about the epidemic and the economic downturn have made investors look to gold. After establishing a new price level of over 60 million dong/tael, the gold price has stabilized for nearly 2 years.

The second “fever” of the domestic gold market took place in early March 2022 when the Russia-Ukraine war occurred. Gold price spiked to a historic high of 74.4 million dong/tael, then dropped to 68-69 million dong/tael and remained stable in recent days.

Whenever the world’s political situation fluctuates, with potential uncertainties such as war, investors often look to gold as a safe haven asset. The war gradually cooled down, investor sentiment stabilized, continued to invest in production and business, and the gold market stabilized again.

In Vietnam, after Decree 12 on the management of gold business was born, gold is no longer considered a trading unit. Goods and assets cannot be converted or compared with the price of gold. After many years of stable gold price, investors are no longer interested in gold because compared to other investment channels such as savings, investment in corporate bonds, securities, real estate…

In addition, the signs of economic prosperity in the first half of 2022 when the policies of economic recovery and development gradually took effect have made investors boldly invest in other economic sectors. This is one of the reasons why the gold market has been gloomy in recent times.

Economic expert Nguyen Tri Hieu warned: “With the gold market, investors should not invest according to the movement, but need to research and understand how the gold market is going to make wise decisions. good”.

Do not buy gold according to the movement

Economic expert Dinh Trong Thinh assessed that the difference between domestic and international gold prices is too high. If gold is hoarded, buyers have to pay a more expensive price of 15-18 million dong/tael (depending on time) than the world price. This puts investors at great risk if the market reverses.

“Investors should only buy gold in small amounts when absolutely necessary. Now is not the right time to buy gold as a long-term investment. People should only buy when the difference in the price of gold in the domestic and international markets is at a reasonable level, at 2-3 million dong/tael,” Thinh advised.

Sharing the same opinion, economist Nguyen Tri Hieu said that to avoid risks, investors should not put their eggs in one basket. With idle money, investors should only invest a part in gold, the rest is divided into other investment channels such as real estate, production and business.

“With the gold market, investors should not invest according to the movement, but need to research and understand how the gold market is going to make wise decisions,” Mr. Hieu shared.

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