Gold ring prices have continuously increased and broken all records in recent days. At the end of March 6, the price of this type of gold reached a record high of 68.5 million VND/tael (selling price), surpassing the old record of 68.35 set on March 5.
From the beginning of the year until now, the price of gold rings has increased by 5.5 million VND/tael.
Gold ring prices have been continuously increasing from early 2024. (Graphic: Huy Manh)
Although gold rings are expensive, the shortage of gold rings has recently appeared. A survey by VTC News shows that many large stores on Tran Nhan Tong, Cau Giay… street (Hanoi) have to announce that they are out of stock when customers inquire about buying gold rings.
Some small stores still have gold rings, but the quantity is not much. At the end of March 1, at Ha Dung gold shop on Tran Nhan Tong street, the store owner said that there were only a few 1-tael round smooth gold rings, one 0.5-tael ring, and one 2-tael ring left.
Similarly, at the SJC branch in Giang Van Minh street (Ba Dinh, Hanoi) at the same time, the staff also said that there are no round smooth rings left. Meanwhile, at the SJC branch on Tran Nhan Tong street, the staff informed that they have run out of 1-tael rings.
Although these stores have restocked afterwards, the phenomenon of out of stock still occurs in many places. Many customers have complained that they could not buy gold rings at many times. ” It is not easy to buy gold rings like before because there is not much stock. I had to go twice to buy them “, said Ms. Anh Hoa from Hai Ba Trung district.
In fact, gold rings have been in short supply since the Vía Thần Tài day (February 19). Many stores have had to ask customers to come back at another time in order to buy round smooth gold rings.
Gold ring prices are soaring but still attract customers. (Illustration: Minh Duc).
Why is there a shortage?
Explaining the phenomenon of scarce gold rings, Ms. Nguyen Thi My – the owner of a gold shop in Hanoi, said that the psychology of many buyers nowadays is to want to accumulate assets because the interest rates in banks are too low. However, people now prioritize buying gold rings instead of gold bars as before because of concerns that the upcoming amendment to Decree 24 will have a strong impact on the gold bar market.
” When the authorities reconsider the monopoly issue, the SJC gold price may decrease significantly, becoming closer to the world price conversion, meaning it may decrease by more than 10 million VND/tael. Therefore, many people have switched from buying gold bars for accumulation to buying gold rings and jewelry to minimize risks “, Ms. My said.
From another perspective, Mr. Huynh Trung Khanh, Vice Chairman of the Vietnam Gold Business Association, analyzed: Since the implementation of Decree 24/2012 on gold market management, enterprises have not been allowed to import raw gold. Enterprises can only buy gold on the market to produce fine jewelry.
” Buying floating gold on the market does not guarantee the requirements of invoices, goods and services declaration forms, and the risk of buying smuggled gold can be considerable. The tightening of measures against gold smuggling by management agencies recently has made many domestic businesses afraid to buy floating gold on the market, thereby further limiting the supply of raw gold “, Mr. Khanh said.
In addition, the business of selling round smooth rings brings lower profit margins compared to other jewelry items that require processing fees. Therefore, round smooth rings are not a priority for business expansion when the supply of raw materials is limited.
According to Associate Professor – Dr. Dinh Trong Thinh, the scarcity of round smooth rings is due to the overly strong demand of buyers. When the price of gold rings is much cheaper than that of gold bars, the corresponding risk when the market reverses will be lower, thus attracting more buyers. Currently, the price of gold bars has reached 81 million VND/tael, which is 12.5 million VND/tael higher than gold rings
The increasing number of buyers will lead to higher prices, and as a result, gold rings will become more attractive, leading to the occurrence of out-of-stock situations.
Gold rings are showing signs of scarcity in many places. (Photo: Cong Hieu).
In addition to holding SJC gold bars, many Vietnamese people also hold 24k round smooth gold rings as a habit. Particularly in the past few years, when the price difference between SJC gold and international gold prices is too large, many people have switched to accumulating assets through round smooth 24k gold rings.
In addition, before and after the Lunar New Year, many people organize weddings, resulting in high demand for this type of gold.
Therefore, in the first two months of 2024, the prices of gold rings and jewelry are trending higher compared to SJC gold bars.
Why is the gold price soaring?
Explaining why gold prices have continuously reached record highs recently, Mr. Nguyen Tri Hieu, a financial expert, said that the continuous increase in international gold prices has directly affected domestic gold prices, pushing them higher.
In addition, in the Vietnamese market, the supply and demand of gold are not stable. The supply of gold is still limited because currently, the State Bank of Vietnam is the only unit allowed to import gold.
” At this time, when market demand is high, like usual “opening up the import of gold” should be considered. I think the provisions in Decree 24 should be adjusted so that more gold businesses can participate in gold imports instead of only the State Bank of Vietnam, which will help stabilize domestic gold prices “, Mr. Nguyen Tri Hieu said.
Mr. Hieu further analyzed that currently, bank interest rates are getting lower and lower, the real estate investment channel has not fully recovered, and the stock market fluctuates. Therefore, gold is still considered an attractive investment channel. The increase in the price of gold is also understandable.
