On the afternoon of February 29, at Mi Hong gold shop (Binh Thanh district, Ho Chi Minh City), there were quite a few customers buying and selling gold. Many customers came looking to buy plain round gold rings, but the staff informed them that the products had been out of stock for several days and they did not know when they would have more. Unable to buy plain round gold rings, many customers turned to buying other types of jewelry such as bracelets, necklaces, and other styles of rings.
“Gold jewelry prices are increasing but still cheaper than gold bars, so I bought them to keep. Plain round rings have the lowest processing cost; when I need to sell them later, I will have minimal loss so I chose to buy this type of product. However, many gold shops in Ho Chi Minh City no longer have any plain round rings, or if they do, the quantity is very limited,” said Ms. Minh Hoang (from Phu Nhuan district).
Many people buying gold jewelry at a gold shop in Binh Thanh district, Ho Chi Minh City. Photo: Duy Anh
Ms. Thu Huyen, from Minh Phuoc gold shop (District 5), said that customers buying plain round gold rings had increased by nearly 20%. According to her, after the God of Wealth Day (10th of the Lunar New Year), the number of customers buying gold usually decreases. “However, this year is different, the God of Wealth Day was quite quiet, but afterwards, the number of customers increased day by day.
Gold rings and gold jewelry are priced at a maximum of 65 million dong per tael, which is about 15 million dong cheaper than gold bars; and especially, gold rings are currently increasing in price rapidly, so many people seize the opportunity to buy and hoard them. There are days when our shop does not have enough rings to sell to customers” – Ms. Huyen added.
The owner of a famous gold shop in Ho Chi Minh City admitted that they had been out of plain round rings for several days and the shop did not have enough gold material to craft the rings. On the God of Wealth Day, the shop sold a maximum of 1 ring per person, already pressed into a sheet of gold.
“There has never been a situation like this before. Unable to buy raw materials, we cannot make rings to sell, this is beyond our control, so we have to accept it,” the person said.
Local scarcity, short-term shortage?
On February 29, speaking with Tien Phong newspaper about the crowd rushing to buy gold, Mr. Truong Hien Phuong, senior director of KIS Vietnam Securities Company, said that besides the surge in gold buying after the Lunar New Year and God of Wealth Day, there are still many other reasons.
The first reason is the sudden increase in demand due to concerns about political instability worldwide. In such a situation, gold is the best and safest “hideout”. Wealthy individuals often choose to buy gold as a precautionary measure for speculation…
Another reason is the shortage of gold raw materials, which may be due to prioritizing the production of gold bars; the gold import policies are not open and flexible because importing too much gold will affect the foreign exchange balance; it is also not ruled out that major players create virtual scarcity of gold to push prices up…
“These are the main reasons leading to the scarcity of gold in recent days. However, I believe it is only a local and short-term scarcity and the market will soon return to normal” – Mr. Phuong said.
