The rate of increase in gold prices has slowed down.

Domestic gold prices have been rising for the past two weeks. By September 6th, SJC gold bars had reached a new record high of 135.4 million VND. Gold rings also approached the 131 million VND/ounce mark.

According to the General Statistics Office ( Ministry of Finance ), the gold price index in August increased by 1.2% compared to the previous month and by 48.62% compared to the same period last year. On average, in the first eight months of this year, the gold price index increased by 40.25% compared to the same period last year.

Speaking with VietNamNet reporters, financial expert Phan Dung Khanh said that domestic gold prices are affected by many factors, including the trend of world gold prices reaching new highs, exchange rate fluctuations, and investor expectations.

He analyzed that world gold prices have continuously reached record highs over the past two years, although the rate of increase has slowed down in the last three months. The upward trend in domestic exchange rates has also contributed to pushing gold prices up. In addition, investor expectations, along with the fact that some other markets such as stocks have also continuously reached record highs, have caused a short-term shift of capital towards gold as a safe haven.

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Gold prices are constantly reaching new highs, leaving many wondering whether they should sell to lock in profits or buy to wait for further increases? Photo: Nam Khanh

However, according to him, despite the government's numerous policies in recent times, the difference between domestic and international gold prices remains very high, exceeding 20 million VND per tael, and he does not rule out the possibility of speculative elements.

In the current context, Mr. Khanh believes that the rate of increase in gold prices has slowed down significantly compared to last year. In 2024, domestic gold prices are expected to fluctuate between 60 and 90 million VND/ounce, an increase of about 50%. However, in 2025, the increase will be lower. While last year, gold prices repeatedly reached new peaks within just a few days, this year the most recent peak was in April.

"Medium and long-term capital flows have shifted to other investment channels such as stocks and real estate due to their faster profitability and potential for better returns. Therefore, although gold prices may rise, it is unlikely to break through as sharply as before," he said.

Furthermore, the slowdown in the flow of international capital into gold has also affected the upward trend of the precious metal. Geopolitical uncertainties such as the Russia-Ukraine tensions have somewhat subsided, making the trend of investing in safe-haven assets like gold less intense.

In the long term, this expert assesses that global capital flows into gold are slowing down due to less geopolitical tension, strong economic recovery in the US and many other countries, including Vietnam, which is boosting investment in technology and manufacturing. When capital flows are directed into production and business activities such as stocks, gold is no longer the optimal choice.

Should I sell to take profits or buy and wait for the price to rise further?

If buying gold at this time, expert Phan Dung Khanh warns that the risks are very high. This is because the rate of increase in gold prices is no longer as fast as last year. Furthermore, the price difference between domestic and international markets is too high.

"If you buy gold to hold for 5-10 years, the risk is not high. However, if you hold gold in the short term, and the world price doesn't increase, and the price difference between domestic and international markets narrows, those who bought gold at this time could suffer heavy losses," Mr. Khanh said.

The expert suggests that investors holding gold for the short term should consider taking profits to protect their capital and avoid risks from sharp market fluctuations.

Associate Professor Dr. Nguyen Huu Huan (Ho Chi Minh City University of Economics) also warned that when the price difference between domestic and international gold is too high, investors should not buy, especially not chase the market (FOMO).

Domestic gold prices are currently heavily dependent on "policy risks." The expert believes that the government will not allow this excessively large price disparity to continue. Fundamental solutions to stabilize the market will soon be implemented.

Mr. Huan noted that when the State Bank of Vietnam intervenes in the gold market with specific policies, domestic gold prices will certainly cool down, and investors will suffer significant losses if they buy at the current price.

Source: https://vietnamnet.vn/gia-vang-kho-but-pha-manh-nhu-truoc-khong-nen-mua-duoi-theo-thi-truong-2439898.html