Should we 'surf' with gold?

(Baonghean.vn) - Over the past month, the price of gold has fluctuated a lot, peaking at nearly 40 million VND/tael in early July. Accordingly, transactions on the gold market have also decreased along with the price. The trend is that more and more people are participating in short-term investments to seek profits. However, according to experts in the field of trading this precious metal, people need to be cautious when investing in gold.

In early August, the gold fever has "calmed down" following the trend of world gold prices and thanks to the intervention of the State Bank.

Ms. Phan Thi Luong (Quan Bau Ward, Vinh City), who works in business, is often interested in fluctuations in gold prices. Knowing that gold prices have dropped, she went to a gold shop to find out. Ms. Luong said: "At the beginning of July, when the gold price was high, I sold some of the gold I had accumulated and made a profit. Then, the gold price dropped, I bought it, and when the gold price increased, I sold it again to take profit. Today, the gold price has dropped sharply, I am researching to buy, hoping that the gold price will continue to increase in the future."

After a sharp increase in prices since early July, the gold market has cooled down. However, many people are still buying, expecting prices to increase in the near future (Photo: Transactions at the North Central Branch - Agribank Vietnam Gold Corporation)

Instead of buying gold for long-term accumulation like before, a part of the people tend to invest in gold in the short term. Recently, Mr. Nguyen Van Khang (Vinh Tan, Vinh City) often goes to gold companies to check prices. He said: "My family has a little extra money, so we used to buy gold to store. Recently, the gold price has gone up, and I haven't had time to sell yet, so I consult the market, see if it's a good time to sell, so I can make a profit. Instead of waiting until I need cash to sell like before."

According to the general assessment of many gold traders, after the fluctuation in gold prices in early July, the gold market in the province has also cooled down. However, the gold price is still fluctuating, increasing and decreasing continuously, so customers' demand for buying is still greater than their demand for selling; because they expect the gold price to increase. Customers mainly buy gold bars and rings for investment purposes.

Gold bars and rings are selling well as more and more people are investing in gold, recently.

According to Mr. Nguyen Anh Tuan - Head of Sales Department - North Central Branch - Agribank Vietnam Gold Corporation: "Although there is a group of people who switch to short-term gold investment when there are price fluctuations. However, customers are still greatly affected by "crowd psychology", often rushing to buy when gold prices increase. On the contrary, when prices decrease, purchasing power also decreases".

That mentality has invisibly pushed up the price of gold, making it difficult for people to make a profit and often suffer losses if they invest in the short term, in a "surfing" style.

Gold prices are gradually stabilizing again, with SJC gold prices listed at VND36.4 million/tael for buying and VND36.55 million for selling on the morning of June 8. Domestic gold prices are close to world gold prices, so if you buy gold for long-term accumulation at this time, the safety is quite high. However, according to experts, people need to be cautious when buying and selling this precious metal.

According to Dr. Nguyen Cong Nhat - Head of the Faculty of Business Administration - Nghe An University of Economics, people "follow" the gold rush, avoiding times when gold prices suddenly increase, to avoid risks.

According to Dr. Nguyen Cong Nhat - Head of the Faculty of Business Administration - Nghe An University of Economics, while other investment channels such as dollars are difficult to generate profits, real estate is difficult to create "waves", gold is still a safe haven. If there is surplus money, people can choose gold to store at the present time. According to Mr. Nhat's explanation, the "bottom" gold price of 33 million VND/tael has been maintained for a long time (over a year). Therefore, the recent increase in gold prices has only re-established a state of price equilibrium.

Gold prices are unpredictable, but the world situation has many fluctuations, and it is forecasted that in the coming time, gold prices will fluctuate in an upward direction. However, people should not "follow" the gold fever, and avoid times when gold prices suddenly increase, to avoid risks.

Sharing the same view, Mr. Nguyen Anh Tuan - Bac A Gold & Finance Investment Joint Stock Company, Vinh branch said: In fact, domestic gold prices depend heavily on world gold prices, so prices can reverse very quickly. People should avoid buying gold when the market is "wavey".

Because, when the margin between buying and selling is large, it means that the buyer buys at a high price but the price sold to the store is at a low difference. So even if the gold price increases, the profit will be low or no profit. Therefore, if you do not understand the gold market, you should not "surf" gold. Gold investors should be cautious, closely follow the market developments, to invest reasonably, should not use all idle money to focus on one investment channel - gold, to ensure safety.

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