Gold price 'dancing', people need to be careful when 'surfing'

On March 18, 2024, the price of SJC gold turned down again, specifically, the buying price was 79 million VND/tael and the selling price was 81 million VND/tael (down 200,000 VND for buying and down 720,000 VND for selling). However, this morning, March 19, the gold price rebounded, approaching the 82 million VND/tael mark.

In Nghe An, at 11:00 a.m. on March 19, the listed gold prices were: SJC gold at VND79.9 million/tael (buy) and VND81.97 million/tael (sell); plain round rings were VND67.30 million/tael (buy) and VND68.80 million/tael (sell). Although the gold price has a tendency to rebound, compared to the peak price reached a week ago, those who bought gold bars are currently losing VND2.6 million/tael; gold rings are losing VND2 million/tael.

Ms. Phan Thi Ngoc O., a gold investor in Le Mao (Vinh City) said: "Although I have had experience in "surfing" gold for many years, I could not have expected the price of gold to fluctuate so much. In fact, I lost about 3 million VND per tael of gold in just 1 week of investing. Now, I need money but selling gold would be a loss, so I have to find other solutions."

When the gold price hit a record high of VND79.90 million/tael (buy) and VND82.05 million/tael (sell), many people sold to take profits. Among them, many "surf" buyers also earned VND3-4 million/tael in less than a month. Seeing the profit, many people withdrew their savings, even borrowed money to invest in gold. However, the gold market continued to fluctuate, not as many people had calculated and expected.

“When the price of gold dropped to around 81.2 million VND/tael, I withdrew my savings book and bought 4 taels of gold. In just 1 week (from March 13 to now), I have now sold it and lost nearly 6 million VND,” said Ms. Luong Thi H., a person who bought gold for investment.

The recent developments in the gold market show that this crowd psychology effect has influenced many people's expectations about capital investment skills to make a profit. Gold, or any investment product, has risks, because it is not only the ability to judge the price increase or decrease based on market sentiment, but also requires capital investors to create their own analytical skills from many sources of information to make reasonable decisions at each time.

Recently, along with the record-breaking gold price increase, there is also the driving force from low deposit interest rates, along with that, the stock investment channel has not recovered, the real estate market is still gloomy, causing many people to follow the "crowd mentality" and shift their capital investment to gold in the short term to make a profit without being fundamental and calculating carefully.

In the context, the current gold price in Vietnam is quite far from the world gold price, especially SJC gold, at times the difference is up to 20 million VND/tael. On the other hand, the difference between buying and selling is too large, posing risks when people need to sell gold to recover capital. Therefore, it can be said that this is not a suitable time to buy gold for long-term investment.

"In just a short time, the price of gold has continuously fluctuated, increasing and decreasing from several hundred to several million VND/tael within a day. If you do not calculate carefully, you will not be able to react in time, leading to losses. On the other hand, although the price of gold has decreased at times, it is still at its peak, so investing in gold at this time is still quite risky. Therefore, even though I have a large amount of idle money, I still do not dare to buy gold for storage at this time," said Mr. Dao Minh H.

According to many opinions, the price of gold may reach 2,500 USD or even 3,000 USD/ounce in the future. It is expected that in the next 6 months, the price of gold will experience a growth period, especially in the end of the third quarter and the beginning of the fourth quarter of 2024, in line with the trend of gold prices usually increasing at the end of the year. With the increasing trend of global gold prices, domestic gold prices will also adjust accordingly.

However, the increase rate as well as the difference between the price of SJC gold and gold rings compared to the world market will depend on the State Bank's management policy, the update and amendment of Decree 24/2012/ND-CP of the Government related to the management of gold trading activities. Therefore, people need to consider carefully before making a decision to invest in gold.