Is Gold’s Price Drop Temporary or Will it Plummet to 100 Million VND per Tael?

While experts acknowledge that it’s challenging for gold prices to drop to the 100 million VND per tael mark in the short term, they believe that the recent developments in the US-China trade war could impact the market.

Dr. Nguyen Tri Hieu explains that the de-escalation between the US and China is a positive sign, but the lack of clarity on specific terms indicates ongoing instability. This could be a tactical move rather than a long-term resolution, and the market may remain volatile until concrete outcomes are reached.

“In the next two months, the US will be negotiating trade policies with several countries, including Vietnam. This will likely impact the domestic gold and stock markets. While gold prices may dip, it is unlikely to reach the 100 million VND per tael level,” said Mr. Hieu.

Mr. Hieu also points out that the high demand for gold among Vietnamese citizens, coupled with the ongoing scarcity of gold jewelry and bullion, makes a significant price drop unlikely. Mr. Nguyen Quang Huy, CEO of Finance and Banking at Nguyen Trai University, shares a similar sentiment, noting that gold prices in Vietnam are influenced by various factors beyond global price movements.

Historically, when global gold prices have plummeted, domestic prices in Vietnam have displayed resilience, sometimes even moving in the opposite direction. The current gap of 17-18 million VND per tael between global and local prices underscores this divergence. Mr. Huy attributes this to the cultural tendency in Vietnam and other Asian countries to hoard and save gold as a defensive financial strategy.

As a result, even during periods of low demand, a considerable amount of capital is injected into the gold market due to the prevailing mindset among Vietnamese citizens.

Given these dynamics, gold expert Tran Duy Phuong advises investors to exercise caution before purchasing gold. He states, “Investing in gold at this stage carries considerable risk due to the relatively high and volatile prices, especially compared to global rates. Investors should await more substantial dips to buy at reasonable prices and avoid panic buying or selling. Diversifying investment portfolios is crucial to mitigating risks effectively.”

Dr. Hieu advises those looking to sell their gold to consider doing so if they have achieved profits of 20% or more over a one-year period, as prices could potentially drop further. For prospective buyers, he recommends waiting for clearer market signals.

On the morning of May 14, international gold prices continued their erratic behavior, rebounding after a sharp decline. Prices are currently 57.2% higher (equivalent to 1,181 USD per ounce) than at the start of 2024. Converted rates, including taxes and fees, place international gold at approximately 103.3 million VND per tael, a difference of about 17.3 million VND per tael compared to domestic prices.

Domestic gold prices have recovered from a recent dip and remain above the 120 million VND per tael mark. Gold bullion is trading at 118.5 – 120.5 million VND per tael (buy-sell), while gold jewelry is at 113 – 115.5 million VND per tael.