Local gold prices lead global prices
Global gold prices are awaiting the impact report on the interest rate adjustment trend from the US Federal Reserve (Fed) through the personal consumption index report. However, on the last day of February, the domestic gold market witnessed a steep increase in the prices of both SJC gold bullion and gold rings.
On the morning of February 29, the Saigon Precious Metals, Gems and Jewelry Company adjusted the price of gold bullion twice. At 9:50 am, the price of each tael of SJC gold bullion increased by 700,000 VND for both buying and selling, reaching 78-80 million VND/tael. This is the highest level of gold prices since the beginning of 2024, but it is not as high as the peak set on December 26 of the previous year.
However, the price of 80 million VND/tael did not last long. When the price of gold bullion approached the old peak, the selling volume increased, causing the price of gold bullion to reverse and decrease after only half an hour. At 10:10 am, SJC listed a price of 77.7-79.7 million VND/tael and ended the trading session of the day at 77.5-79.5 million VND/tael for buying and selling.
SJC gold bullion on February 29 rose to 80 million VND/tael and then decreased
Meanwhile, the price of gold rings has been continuously adjusted upward from morning to afternoon. At SJC, the price of plain rings increased to 64.1-65.3 million VND. Bao Tin Minh Chau raised the price of gold rings to nearly 65.4-66.5 million VND for buying and selling. This is the highest price ever.
Domestic gold prices are increasing faster and stronger than global prices from the beginning of the week until now. Currently, the world gold price per ounce is around 2,036 USD. Converted at the Vietcombank exchange rate, the world gold price is equivalent to 61 million VND/tael. Accordingly, SJC gold bullion is higher than the world gold price by 18.7-19 million VND/tael, while gold rings are higher by 4-5 million VND/tael.
Despite the State Bank’s requirement for measures on the gold market, domestic gold prices are becoming more expensive and show no signs of cooling down. Moreover, in the context of the world gold price forecasted to increase due to political fluctuations, the US presidential election, the Ukraine crisis …, especially the monetary policy of the Fed, many experts predict that domestic gold prices will set a new record if there is no intervention from regulatory agencies.
Scarce supply
Gold prices have abnormally increased, especially the continuous record-breaking price of plain rings, while purchasing power at this time is not as high as that during the God of Fortune holiday 10 days ago. Many stores have announced the shortage of gold rings.
These days, at many reputable gold shops on the “gold streets” in Hanoi such as Ha Trung (Hoan Kiem), Giang Van Minh (Ba Dinh), Tran Nhan Tong (Hai Ba Trung), customers asking to buy plain rings are informed that they are out of stock or do not have any. At the SJC branch in the North on Giang Van Minh Street, the staff here stated that there are no plain rings. When asked for SJC gold bullion, the answer received was also negative. On Tran Nhan Tong Street, many stores also announced that they were out of stock of 1-tael gold rings.
The shortage of gold raw materials for making gold jewelry, including gold rings, has been recommended and warned by the Vietnam Gold Business Association since the second half of last year. This is also the reason for the sharp increase in the price of gold rings since 2023.
For the past decade, domestic businesses have two ways to produce gold jewelry and handicrafts, including plain rings. Businesses buy gold back according to the sales invoice of other businesses or buy according to the invoice of mining companies. In addition, businesses buy gold according to commodity list, services without invoices, or what is called floating gold.
For the past 10 years, since the implementation of Decree No. 24, domestic businesses have not been licensed to import gold raw materials. Therefore, the source of purchasing gold from the market is the only source for businesses to produce jewelry.
According to Mr. Huynh Trung Khanh, Vice Chairman of the Vietnam Gold Business Association, this has put many domestic businesses in a situation where they have to use imported gold of unknown origin for crafting gold jewelry. The recent crackdown on gold smuggling and investigation by the Ministry of Public Security has made many domestic businesses worried. In addition, the State Bank of Vietnam has recently required that businesses importing gold for sale have clear and transparent origin invoices, so there is no gold for producing gold rings.
In addition, the increasing demand for plain rings by people, according to many experts, has also quickly caused a shortage of this product during peak periods. A portion of the population has shifted from buying gold bullion to buying gold rings while they are waiting for new regulations on whether SJC gold bullion will have exclusivity or intervention measures to reduce the price difference between gold bullion and the world gold price, as directed by the Prime Minister. At the same time, in the context of low interest rates, many people have shifted to investing in gold.
