High gold price gap likely to persist

Vietnam is not the only country with a difference in domestic and international gold prices. Photo: Duc Thanh

Difficult to reduce gold price difference when supply is scarce

The difference between domestic and world gold prices is still around 18 million VND/tael, returning to the level before the State Bank implemented a series of solutions to intervene in the gold market in 2024.

In a report to the National Assembly , the State Bank admitted that one of the reasons for the above situation is that the supply of gold bars on the market has not increased since the beginning of 2025. At the same time, it does not rule out the possibility that some businesses and individuals are taking advantage of market fluctuations to speculate, inflate prices, and profit.

Sharing with reporters, Mr. Shaokai Fan, Director of Asia- Pacific region (excluding China) and Director of Global Central Banks at the World Gold Council (WGC), said that Vietnam is not the only country with a difference in gold prices. The main reason is that countries set import control regulations (restricting imports or imposing high taxes, leading to an imbalance in supply and demand). In China, domestic gold prices are also much higher than in the world.

According to Mr. Shaokai Fan, gold speculation in Vietnam is not an exception or an anomaly, but a natural phenomenon in free markets. “The management agency needs to have solutions to prevent excessive speculation, because excessive speculation can lead to strong fluctuations in the market, affecting the investment environment,” Mr. Shaokai Fan recommended.

In Official Dispatch 64/CD-TTg dated May 13, 2025, Prime Minister Pham Minh Chinh requested the State Bank to closely monitor the developments in world and domestic gold prices, promptly implement solutions according to regulations when necessary to stabilize prices and stabilize the gold market.

The Prime Minister also requested the State Bank to promptly issue inspection conclusions on enterprises and credit institutions trading in gold. The Ministry of Public Security shall preside over and coordinate with the State Bank and inspection, examination, law enforcement agencies and relevant authorities to promptly implement measures as prescribed to strictly handle violations of the law related to the gold market and gold trading activities, especially acts of smuggling, speculation, illegal trading, market manipulation, etc.

However, Mr. Shaokai Fan said that Vietnamese people are very fond of gold and the demand for gold investment is still very strong. Therefore, the story of high gold price difference in Vietnam will continue in the coming time, if the State Bank does not have a solution to increase supply.

Money flow into gold has not stopped

The world gold price once reached nearly 3,500 USD/ounce on April 22, 2025, but has now dropped to more than 3,200 USD/ounce after the US and China had initial negotiation results. According to Mr. Shaokai Fan, similar information reversals can happen every day, the gold price can reverse and decrease, meaning the gold cycle is getting shorter and shorter.

Mr. Nguyen Viet Duc, Digital Business Director of VPBank Securities Joint Stock Company (VPBankS), said that investing in gold at this stage is quite risky, because after a strong increase wave is often a strong decrease wave.

It is difficult to predict gold prices in the near future.

- Mr. Shaokai Fan, Director of Asia-Pacific region (excluding China) and Director of Global Central Banks at the World Gold Council (WGC)

The price of gold in Vietnam in the coming time will be directly affected by the world gold price, exchange rate factors, gold market management policies and fluctuations in other investment channels such as stocks, real estate... It is very difficult to predict the price of gold in the coming time, but I think that in the context of global instability, institutional and individual investors are increasingly looking for gold to prevent uncertainties. In Vietnam, the demand for gold investment is still very strong, but we must also be vigilant and always ready for any surprises.

Although the risk of gold prices falling is real, according to experts, the prospect of gold prices rising is still very high. Even if gold prices fall, the decrease will not be much, because many institutional investors are still "watching" for gold prices to fall to increase purchases.

According to the World Gold Council, total investment demand of gold ETFs by the end of the first quarter of 2025 more than doubled to 552 tons, up 170% year-on-year and reaching the highest level since the first quarter of 2022.

“According to the data I have, the cash flow into gold ETFs continued to increase in April 2025. Although it may turn down in May 2025 after the results of trade negotiations, I believe that from now until the end of the year, the cash flow into gold ETFs will still increase strongly,” said Mr. Shaokai Fan.

Currently, the total value of gold holdings in gold ETFs is up to 345 billion USD, the highest ever. Meanwhile, the demand for gold bars and gold coins globally has also increased sharply, especially in the Middle East and China. China bought 124 tons of gold in the first quarter of 2025 - the second highest quarterly increase in history. Chinese individual investors continue to rush into gold when the stock and real estate markets are difficult.

Gold demand from central banks continues to be stable at a high level. It is estimated that this year, these "sharks" may net buy more than 1,000 tons of gold. Since the beginning of the year, the central banks of Poland, China, Kazakhstan, and the Czech Republic have been buying gold aggressively. In particular, in previous years, the Central Bank of Kazakhstan often sold gold when the price of gold increased, but recently, the Governor of the Central Bank of this country announced that he would not sell gold, but would continue to buy more.

Currently, gold only accounts for 5-10% of the portfolios of central banks, so the room for these "big guys" to increase their gold reserves is still very large, especially in the context of unclear trends in the USD and US government bonds. In addition, in general, the world's political economy is still in a state of instability. Therefore, analysts believe that gold demand will continue to increase in the coming period - this is a factor that greatly supports gold prices.

Source: https://baodautu.vn/chenh-lech-gia-vang-cao-co-nguy-co-con-keo-dai-d284113.html