On the morning of October 15, SJC gold was traded at VND69.7 million/tael for buying and VND70.72 million/tael for selling. Previously, on the morning of October 14, gold prices increased sharply, surpassing VND71 million/tael. Given this situation, experts advise investors to consider the timing of buying and selling.
Along with that, the high price of gold has a positive impact on the economy , because the amount of money in circulation to buy gold increases, the economy will be "lubricated".
Why did the price of gold increase suddenly?
Responding to VTC News, economic expert Dr. Nguyen Bich Lam, former General Director of the General Statistics Office, analyzed that the basic cause is the world financial market.
Gold is a safe haven for assets and finances. Therefore, geopolitical instability has caused instability in the USD and instability in the international financial market, so people often buy gold to store.
Gold prices skyrocketed (Illustration photo).
“The war between Russia and Ukraine has been going on for a long time, but the new war between Israel and Hamas has not ended yet and will disrupt the oil, gold, USD and financial markets. That is the reason why gold prices are pushing up,” said Dr. Nguyen Bich Lam.
Meanwhile, expert Nguyen Tri Hieu said that the domestic gold price increased to more than 70 - 71 million/tael, which is the highest price in many years. The reason is that the world gold market and the internal economy, the world gold price increased suddenly by more than 31 USD/ounce, trading at 1,932.5 USD/ounce, equivalent to nearly 57.3 million VND/tael.
“Gold prices increased partly due to the war between Israel and Hamas and the gloomy world economic situation. Along with that, the internal growth of the Vietnamese economy in the first three quarters of the year was low, the financial and stock markets were uncertain, bank deposit interest rates were decreasing, and the real estate market was gloomy,” Mr. Hieu analyzed.
Geopolitical fluctuations have pushed up the price of gold in Vietnam and the world. The difference between the domestic gold price and the world gold price is quite high because the domestic gold price is not linked to the world gold price.
According to Mr. Hieu, the domestic gold price is increasing but we cannot consider it a representative of the economy, because the domestic gold price is far away and does not move in the same direction as the world gold price, and does not reflect the development of the economy.
"First, when the economy goes down, the price of gold increases, when the economy develops, the price of gold also increases. Therefore, it cannot measure the development of the economy. However, at the present time, it more or less affects the economy.
Second, the Vietnamese government has been very successful in combating gold in the economy over the past decades. Banks have stopped lending and mobilizing gold, so there is no longer a phenomenon of gold in the economy,” Mr. Hieu said.
Nowadays, people still have the mentality of storing gold, but not speculating or hoarding like before. When they have money, they will buy gold to “save food for protection, to take shelter”, which has pushed the domestic gold price up for decades without decreasing.
Be cautious in investing and taking profits.
Economist Dinh Trong Thinh said that it has been a long time since the price of gold has increased as strongly as recently, so investors holding gold can think about selling at this time because of attractive profits.
Domestic gold prices fluctuate highly, experts advise investors not to "put all their eggs in one basket" (Illustration photo).
"Investors should not wait for the price to reach its peak before taking profits. In fact, the gold price is increasing but the peak is unknown and can fall at any time. Therefore, if it reaches a point where there is a reasonable profit, investors should sell," Mr. Thinh advised.
The current difference between buying and selling prices is more than 1 million VND/tael, this is a quite large difference, dangerous for gold buyers.
According to Mr. Thinh, the gold market over the years has shown that when gold prices increase or fluctuate abnormally, investors need to be especially cautious and should invest long-term instead of speculating.
"Investors should not "put all their eggs in one basket" but need to observe and carefully consider other investment channels such as real estate, savings, stocks, and bonds," said Mr. Thinh.
Regarding the question of whether high gold prices affect domestic socio-economic development, Dr. Nguyen Bich Lam said that in reality, domestic gold prices are always higher than world gold prices, because businesses and investors always expect prices to increase.
“For many years, the world gold price has decreased but the domestic gold price has increased because the psychology of holding gold of Vietnamese people is greater than that of other countries. In fact, Vietnamese people only hold gold for a period of time. When the gold price is stable, they will convert from gold to other financial assets to make a profit.
Therefore, even if gold prices rise, they can only last for a certain period of time and cannot stay there forever, and they do not have much impact on the economy," Mr. Lam analyzed.
How to control gold prices?
According to Dr. Nguyen Tri Hieu, first of all, we must talk about the role of the State Bank, because they both import and trade gold, so the role of gold trading probably needs to end.
“The State Bank should leave the gold import and gold trading to reputable import enterprises with stable financial status and return the gold trading to the market. When the State Bank withdraws as the supreme manager, the gold market will be more stable and follow the world gold market. When the domestic gold price is higher than the world gold price, there will be an adjustment,” said Mr. Hieu.
Besides, Vietnam should also open a gold trading floor, where professional traders and investors can trade freely and openly, knowing the price fluctuations every hour.
“There is a lot of gold in the population and how can we mobilize it to support economic development? The method is that the State Bank can stand up to receive gold from the population and issue a gold certificate, use that gold for the Government to borrow money from abroad or use it to support the Government's financial plan instead of leaving the amount of gold "lying idle" in the population", Mr. Hieu stated his opinion.
From a positive perspective, Mr. Hieu also believes that when gold prices are high, the money stored by the people will be released for circulation.
“When the gold price is high, people buy it instead of depositing it in the bank, then that amount of money will be pushed into circulation and that is a positive thing. Currently, many investment channels are unstable, from stocks, real estate to bank deposits. This is very favorable for the economy because the cash flow is good,” said Mr. Hieu.
PHAM DUY
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