Gold prices fluctuate, traders make huge profits

06-Mar-2021 Intellasia | Vietnamnet | 6:49 AM Print This Post

The gold price in the world market has decreased by 13 percent this year, causing Vietnamese to lose billions of dollars. Meanwhile, the domestic price has stayed high.

The gold price in the Asian market is closer to $1,700/ounce after falling from the $1,800/ounce threshold last week.

On March 2, the world price fell to $1,718/ounce, or VND48.7 million per tael, not including tax and fees, or VND7.5 million per tael lower than the domestic price.

“The gold price in the world market has been decreasing rapidly, $100/ounce just within one week and $250 so far this year, or 13 percent,” said Do Huu Thanh, an investor in Hanoi, adding that it was not foreseeable.

According to Thanh, the gold price drop did not affect his assets, because the domestic gold price remains high, over VND56 million per tael. Thanh doesn’t intend to sell gold at this moment.

A finance expert estimated that total gold reserves are worth up to $20 billion. With the 13 percent decrease in the last two months, Vietnamese have lost $2.5 billion.

In the world market, investment funds rushed to sell gold as the US dollar recovered and the US bond yield increased. Investors believe that the recovery of the US economy will come sooner than initially planned.

The price of the precious metal fell also because the cash flow is heading for stock market, which has picked up with the news about the Covid-19 vaccine.

While the world price fluctuates heavily, the domestic price remains at VND8 million per tael higher than the world market. The domestic market is quiet with few transactions because of low demand.

Analysts said businesses have still set gold prices at high levels because the domestic market is not highly communicative with the world market and the gold import/export is still carried out based on the quota granted by management agencies. The gold imports are controlled in an effort to prevent foreign currency bleeding.

According to Huynh Minh Tuan from Mirae Asset, demand for gold is weak, while cash keeps flowing into the stock market, VND15-20 trillion each session.

Gold and real estate remain favourite investment channels because investors lack high confidence in the domestic currency. Moreover, the prospect for gold is bright in the international market in the long term. The gold price does not heavily depend on demand. As businesses keep selling prices at high levels, they can make big profits.

Experts believe that gold will still be a good investment channel in the long term because the inflation rate is predicted to increase.

https://vietnamnet.vn/en/business/gold-prices-fluctuate-traders-make-huge-profits-716988.html

 

Category: Finance, Vietnam

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