Gold prices hit six-year peak

One tael of SJC gold is sold at $1,838 in at a branch of Doji Gold and Gems Group in Ha Noi. The domestic gold price rises 16 per cent to hit a six-year high in 2019.-Photo courtesy of Doji

On January 2, the price for one tael of SJC gold was sold at around VND42.68 million (US$1,838) at the biggest gold firms of SJC, Bao Tin Minh Chau and Doji. On the global gold exchange Kitco, the precious metal gained 0.1 per cent to reach $1,518.60 per ounce ($1,829 per tael) on the same day.

According to Reuters, gold prices are set for their strongest annual increase since 2010, as worries over global economic health triggered a surge of interest in precious metals, while palladium soared more than 50 per cent to record highs thanks to supply shortages.

Many analysts told the site that prices were likely to rise further this year with shaky growth and global stock markets potentially looking unsustainable at record highs. They also said central banks were buying more gold and have flipped from tightening to loosening monetary policy, pushing interest rates and bond yields down and making non-yielding precious metals more attractive to investors.

In the local market, the higher prices have not formed a big gold rush like it did in 2010-11, when people bought gold at high prices in mass quantity. Gold prices reached VND49 million per tael at in 2011.

According to a gold trader in Ha Trung Street in Ha Noi: "People formed a queue in front of the small shop to buy gold most of the day in August, 2011."

He told Viet Nam News: “There are fewer ‘gold surfers’. Investors are now very cautious because they experienced how prices dropped sharply in 2011. Quick investment is no longer attractive.”

Gold investor Nguyen Xuan Ca, 67, was lucky to sell all her gold when the prices were at their peak in August 2011, when a tael of gold went for VND49 million.

Ca bought a house with the proceeds, but she also has friends who suffered heavy losses when the prices plummeted later in September.

“Investing in gold now is not profitable and too risky as the global gold prices fluctuate unpredictably,” Ca said.

Other investors thought the State Bank of Viet Nam’s decree No 24/2012/ND-CP issued eight years ago had an impact on their investment. In that decree, the Government made it clear it would have a monopoly over gold bullion production as well as import and export of the precious metal.