Reduce gold holding and gold investment

(Baonghean) -Many investors and people holding gold are hesitant as the market for this precious metal has been plummeting in recent days. Previously, when the price of gold fell, people actively bought to store, but now that the price of gold has fallen, people tend to sell more because they are worried that the price of gold in the coming days will continue to fall sharply according to the State Bank's policy of bringing the domestic gold price closer to the world gold price.

The sharp decline in gold prices in recent days has caused many investors as well as people who hoard gold to suffer heavy losses when in mid-February they bought it for nearly 46 million VND/tael, now it is only 43.7 million VND/tael. Ms. Le (Nghi Phu - Vinh City) was very excited at the beginning of the new year because it was her turn to "take the initiative", thinking that saving at low interest rates was useless, she decided to buy 2 taels of gold for more than 91 million VND. Now that the gold price has dropped, she has lost about 4 million VND. "I am wondering whether to continue holding gold or selling it, selling now will be a loss, but if the price continues to drop, I will lose even more," Ms. Le confided.



The gold market in Nghe An remains stable.

According to our observations, at some banks that trade gold in the province, the number of customers buying and selling is normal, with no sudden trend in the amount of buying or selling. However, according to Ms. Nguyen Thi Bich Tam - in charge of customer service department of Eximbank Vinh, "Previously, customers asked the bank to keep their gold for them, now that the gold price is expected to decrease, customers tend to sell their gold back to the bank, because they do not expect to make a profit in this market. At Eximbank Vinh Branch, the average daily buying and selling turnover is about 50 taels of gold/day. In particular, during the days when gold prices dropped sharply in late February and early March, there were days when the Branch bought 150 - 200 taels of gold".

Ms. Phan Thi Hoai - Deputy Director of Techcombank Nghe An said: "People have always been used to buying and selling gold at gold and silver shops, and have not yet had the habit of going to banks to buy gold, even though the gold prices of banks are lower than those of private gold shops. The difference between buying and selling at banks is from 10,000 to 50,000 VND/tael, while at private shops the difference between buying and selling is sometimes over 200,000 VND/tael."

Talking to us, Mr. Nguyen Duy De - Director of Agribank Gold Branch in the North Central region, said: There are many reasons for the sharp decline in domestic gold prices in recent days. In particular, the main reason is the sharp decline in world gold prices. From mid-February (February 14), the price was 1,640 USD/oz, and by February 28, it had dropped to 1,580 USD/oz, a decrease of 60 USD/oz. In addition, the US economy has shown signs of improvement, with good growth, the unemployment rate has decreased, the USD has increased in value compared to other currencies, and funds around the world have also increased their gold sales. In particular, the State Bank has allowed units holding non-SJC gold to temporarily import and re-export large quantities, with about 11.5 tons of imported gold, in order to reduce the processing time and testing of SJC gold, providing a large amount of SJC gold to the market. At the same time, the State Bank is preparing to organize auctions to sell gold bars to banks and businesses, aiming to bring domestic gold prices closer to world prices. This has affected the psychology of investors as well as people hoarding gold, causing the gold market to plummet.

From a difference of over 5 million VND/tael compared to the world price, the domestic gold price has dropped sharply to only about 2 million VND/tael compared to the world price. With the State's close and quite drastic management solutions, the gap between domestic and world gold prices will certainly be shortened in the near future. People's psychology of holding gold and investing in gold will decrease significantly this year. Strict management of the domestic gold market also limits the smuggling of gold, now buying and selling gold has become more transparent.

Quynh Lan