Gold prices fluctuate erratically.

(Baonghean) - While a few days ago gold prices experienced a new surge, creating excitement and anticipation in the market, on February 19th, gold prices dropped by nearly 1 million VND per tael. Although the price has fallen, it remains high compared to the past few months, making the gold market in Vinh somewhat more vibrant.

Contrary to the predictions of many who were looking for a new investment opportunity, on February 19th, the price of gold fell to 36 million VND/ounce for selling and 33.70 million VND/ounce for buying (9999 Kim Dung Thong, Kim Thanh Huy gold), while on February 18th it had risen quite high to 37 million VND/ounce for selling and 35 million VND/ounce for buying. At the North Central branch of the Agricultural and Rural Development Bank, there was a large number of customers trading, mainly in AAA gold bars and SJC gold. From the morning of February 19th, the price of SJC gold – the national brand gold – decreased by 60,000 VND/ounce compared to the closing price of the afternoon of February 18th, meaning a buying price of 36.38 million VND/ounce and a selling price of 36.46 million VND/ounce.

Gold trading at the North Central Gold Branch.

From February 14th to 18th, gold prices warmed up, marking the strongest weekly increase in the past six months. From a low of 33.34 million VND/ounce (9999 gold), the price rose to approximately 36.4 million VND/ounce. On February 19th, however, gold prices reversed course and fell, much to the surprise of many. Ms. Cao Thi Thu from Quang Trung ward, hearing about the rising gold prices, went to Kim Thanh Huy to buy a few more ounces of gold because her children and grandchildren had given her some money for Tet and she didn't know what to buy. But when she arrived, she found the price had dropped, contrary to rumors; 9999 gold rings were now only around 3.6 million VND/ounce. For Ms. Thu, the lower the price, the better, as she saved nearly 100,000 VND. According to Mr. Nguyen Long Hung, Director of the North Central Gold Branch, the branch lost nearly 60 million VND on February 18th and 19th, 2014, due to the large number of people selling gold while the number of buyers was small. On February 18th, when gold prices were high, the branch bought 130 taels of gold but only sold 30 taels. Buyers, hearing about the high prices, thought they would rise even higher and bought for investment, while sellers, having previously bought at very low prices (33, 34), took advantage of the opportunity to profit from short-term trading.

At Kim Thanh Huy gold and silver shop, there was a large influx of customers. Mr. Tran Van Huy, the owner, said: “In the past few days, the price of gold increased, with Kim Thanh Huy selling gold at 37 million VND/ounce, the highest in many months. The number of customers was relatively high, with the shop selling about 15 ounces a day. But today, the price has dropped, to only 35-35.5 million VND/ounce. Gold prices follow world prices, making it very difficult to predict. Buyers are now well-informed; if we sell at a high price, they go elsewhere, and they also haggle fiercely. The past year has been a difficult time for the gold business. Gold has plummeted like real estate, with fewer people investing than before. Previously, people were speculating about the price fluctuations, but now they only buy gold as a form of savings.”

With a relatively large number of customers at Kim Thanh Huy and the North Central gold branch, while other shops were deserted, it shows that there are still some "loyal" customers in the gold market, always monitoring gold price fluctuations to make a small profit during difficult times. Summary from the North Central gold branch shows that in January 2014, when gold was cheap, the branch achieved sales revenue of 41.4 billion VND, equivalent to the same period last year. In contrast, in 2010, a time of great prosperity for gold shops, the average monthly sales revenue of this branch reached 63 billion VND. Difficult business conditions, low savings interest rates, and a sluggish real estate market mean that a segment of the city's population is still waiting for the gold market to trade and make a profit, albeit a small one. “Making a profit from gold requires someone willing to take risks, constantly monitor prices, and sell immediately when the price rises compared to the purchase price to have any hope of making a profit. If you hesitate, the opportunity will quickly pass,” said Mr. Nguyen Long Thanh. According to Ms. Ho Thi Dung, owner of Kim Dung Thong gold and silver shop, the number of people trading gold has decreased significantly in recent years due to the high risks involved. Falling gold prices while buying prices are high have caused many people to lose tens of millions of dong in a short period.

In reality, the price of gold from brands in Nghe An is significantly lower than that of SJC gold, causing losses for both business owners and buyers. Business owners sell gold at a lower price than SJC, while consumers prefer to buy SJC gold to minimize the difference when selling. Therefore, some consumers are concerned about whether the "local" gold is of sufficient weight and purity. Mr. Nguyen Long Hung, Director of the North Central Gold Branch, stated that profit and loss in the gold and silver business are normal. Even when incurring losses, they still have to buy from customers and cannot close the store; all transactions must be accompanied by complete paperwork and invoices. Currently, people in the city are familiar with AAA-certified gold, so the branch has attracted a loyal customer base.

Text and photos:

Pearl