The profitability of the domestic market is increasingly bleak. Investors have become all too familiar with losses, even when gold prices rise.
This week, after many ups and downs, the price of SJC gold closed at nearly 67.30 million VND/ounce for the selling price, an increase of about 100,000 VND/ounce, equivalent to 0.15% compared to the previous week. However, those who bought gold still lost 600,000 VND/ounce. The reason is that there is still a very large difference between the buying and selling prices.
For several weeks now, gold investors have been losing money every time they buy, even when the price of gold is rising. (Illustrative image)
Specifically, at the close of this week, the price of SJC gold at Bao Tin Minh Chau Gold, Silver and Gemstone Company stood at: 66.70 million VND/ounce – 67.28 million VND/ounce. Buyers of SJC gold at Bao Tin Minh Chau suffered a slight loss after one week.
At the end of the week, the price of SJC gold at Saigon Jewelry Company (SJC), Phu Nhuan Jewelry Company, and Doji Group was listed at: VND 66.60 million/ounce – VND 67.30 million/ounce; VND 66.70 million/ounce – VND 67.25 million/ounce; and VND 66.55 million/ounce – VND 67.30 million/ounce.
The difference between the buying and selling price of SJC gold at Doji Group is the highest, reaching 800,000 VND/ounce. This means that after an investor buys, the price of gold must increase by 800,000 VND/ounce for the investor to break even.
A similar situation is occurring with non-SJC gold, even though this precious metal has experienced stronger growth.
At Bao Tin Minh Chau, the price of Thang Long gold closed the week at: VND 56.38 million/ounce – VND 57.23 million/ounce, an increase of VND 350,000/ounce (equivalent to 0.62%) in both buying and selling prices.
Thus, the price of non-SJC gold increased sharply, 4.1 times faster than the price of SJC gold, but buyers still suffered slight losses after one week.
Specifically, if investors bought gold last weekend and then sold it this weekend, they would have lost 500,000 VND/ounce due to the large difference between the buying and selling prices of non-SJC gold, which reached 850,000 VND/ounce.
Due to the unattractive profit potential of gold, Vietnamese people are less interested in it.
According to a report by the World Gold Council (WGC), Vietnam's gold demand in the second quarter of 2023 reached only 12.7 tons, a 9% decrease compared to the same period in 2022. Demand for gold bars and coins decreased by 5%. A similar trend was observed for gold jewelry, with demand falling from 4.5 tons in the second quarter of 2022 to 3.7 tons in the previous quarter, a decrease of 18%.
Previously, gold consumption in the first quarter also decreased by 12% compared to the same period in 2022. With two consecutive quarters of decline, total gold consumption by Vietnamese people in the first half of the year was only 22.9 tons, a decrease of nearly 32% compared to the same period last year (33.6 tons). Compared to the year before the pandemic (2019), purchasing power also decreased by nearly 29%.
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