SJC gold price increased abnormally, exceeding 80 million VND/tael, will it set a new peak?

At the end of 2023, the world gold price stopped at 2,062.2 USD/ounce, up 13% and marking the best year since 2020.

The domestic gold market at the end of 2023 had a surprising development. The price of SJC gold increased dramatically to an all-time record high, exceeding 80 million VND/tael, then reversed and "plummeted" to around 73 - 78 million VND/tael.

At this rate, how will gold prices fluctuate in 2024?

Gold prices in 2024 are expected to increase more than decrease. (Photo: Nguyen Hue)

Mr. Huynh Trung Khanh, Vice President of Vietnam Gold Business Association, advisor of the World Gold Council in Vietnam, had an interview with VietNamNet reporter.

PV: What is your assessment of the domestic gold price movement in 2023?

Mr. Huynh Trung Khanh: In 2023, the gold price reached a record high, similar to the international gold price. However, the price of SJC gold increased beyond 80 million VND/tael, an unusually high level; while the highest price of gold rings was only 64-65 million VND/tael.

The price of SJC gold is 18 million VND/tael higher than the world gold price. However, immediately after the Prime Minister's directive, the gold price cooled down.

The market is still waiting for the State Bank of Vietnam (SBV) to decide how to handle this situation, as well as how the regulations in Decree 24 will be amended to suit the new situation.

In the meeting earlier this year, the Deputy Governor of the State Bank also acknowledged that such a difference in gold prices is unacceptable and that the State Bank will certainly adjust and amend Decree 24 accordingly.

- Gold is considered to benefit from the anti-inflation trend, what is your opinion on this issue?

Inflation in Vietnam below 4% is acceptable, no need to take refuge in gold. Inflation higher than bank interest rates is worrisome, scary. At that time, consumers will take refuge in gold, to protect the value of their assets.

People have a saying "first soil, second metal", so many people take refuge in land.

With the current complicated geopolitical situation in the world, many investors and consumers have also turned to gold for shelter, especially in countries with high inflation, over 5%. When inflation decreases and the economy stabilizes, they sell gold again.

- So, how do you evaluate the yield of gold compared to other popular investment channels in Vietnam?

This year alone, gold increased by 13-14%, while bank interest rates dropped to 5-6%; and real estate prices fell and "frozen".

The stock market, after reaching a high of 1,500 points, is still hovering around 1,100-1,200 points. Incidents involving bonds and stocks have also made many investors wary, especially those without much experience.

While the general economy is still difficult and geopolitics is complicated, gold has high liquidity, more than savings. At the same time, gold is easy to buy, easy to sell, and has a good price, so this is still a channel to attract investors.

- As an experienced expert, what is your forecast for the development of domestic and world gold prices in 2024?

I think that the domestic SJC gold price will decrease if the State Bank of Vietnam intervenes and amends Decree 24. From there, the gold price will be closer to the world gold price, if there is a difference, it will only be 3-5 million VND/tael.

Many forecast that the world gold price will increase this year. Market developments since the beginning of the year show that the world gold price is still "stuck" at over 2,000 USD/ounce.

The Fed has not yet cut interest rates, but when it does, gold prices will rise again. The world gold price this year averages $2,000-2,100/ounce, and could even reach $2,200/ounce.

When the world gold price reaches that level, the domestic gold price will certainly increase again. The trend of increasing gold prices this year is still more than decreasing.

However, domestic gold prices are unlikely to increase as high and suddenly as at the end of 2023 if the State Bank of Vietnam intervenes.

- So, what is your advice for investors when participating in the gold market this year, sir?

Gold is just an investment tool, not everything. Therefore, you should not invest all your money in gold, only invest about 20% in gold in your investment portfolio.

The rest can be invested in real estate or stocks, depending on each person's investment taste.

Thank you!

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