Domestic gold price hits new peak — Experts warn of risk of 'buying at the peak'

Domestic gold prices continue to hit historic highs, making the market potentially risky. Experts recommend that investors should be cautious and consider a strategy of buying steadily instead of investing all at once.

The high price of gold has caused a difference of up to 20 million VND/tael, posing a great risk to gold investors. Photo: Vietnam+

The domestic gold price has been rising sharply, continuously reaching new peaks, attracting a rush of people to buy despite the scarce supply. The crowd mentality of "fear of missing out" has caused many people to put all their savings into gold. However, experts warn that buying gold at too high a price not only makes investors vulnerable to losses, but also poses the risk of re-"goldenizing" the economy , causing cash flow to flow out of production and business and causing imbalance in the long term.

People rushed to buy, stores were scarce

Gold prices have increased “shockingly”, continuously surpassing all-time highs, and many stores are experiencing shortages of SJC gold bars and gold rings. Some stores even do not have these two types of gold for sale because too many people buy but few sell. Gold jewelry such as necklaces, bracelets, and necklaces require additional manufacturing costs, so very few people buy them.

Recorded on Tran Nhan Tong street ( Hanoi ) in the past 2 days, from early morning, many people flocked to large gold shops to buy and sell. However, when opening, the shops simultaneously announced that there were no more gold bars to sell, the number of gold rings sold was also very small.

Seeing that gold prices were rising too high and were likely to continue to rise, Ms. Thanh Ha (Hanoi) immediately withdrew all her savings to buy gold. However, when she went to some branded stores, they announced that they were out of SJC gold rings and gold bars.

“Late in the morning, I went to Tran Nhan Tong street and only one store still had gold rings. Each person was only allowed to buy a small amount of a few taels, but they still had to wait until September 22 to receive the gold,” said Ms. Ha.

On September 3 and 4 alone (after a long holiday), the price of SJC gold bars increased by 3.3 million VND/tael. Today (September 4), the price of SJC gold at Saigon Jewelry Company and Doji Company is listed at 132.4-133.9 million VND/tael (buy/sell), while at Phu Quy Company it is listed at 131.5-133.9 million VND/tael. This is the highest price ever.

Also in the above development, the price of gold rings at Phu Quy Company was announced from 126.1-129.1 million VND/tael (buy/sell), an increase of 600,000 VND/tael, while at Bao Tin Minh Chau Company, the enterprise announced from 126.5-129.5 million VND/tael, an increase of 500,000 VND/tael compared to the previous closing price.

The difference in buying/selling prices is still maintained at a high level by businesses, in which SJC gold is about 1.5 million VND/tael, and ring gold is 3 million VND/tael to push the risk onto investors.

The higher the price of gold, the more people are attracted to buy it. Photo: Vietnam+

A strange thing is that as of 3:00 p.m. on September 4, the precious metal fluctuated around the threshold of 3,540 USD/ounce, down 29 USD/ounce compared to the previous session's close, but the domestic gold price remained at a "sky-high" level. Converted to Vietcombank's exchange rate, this price is equivalent to 113.2 million VND/tael, nearly 20 million VND/tael lower than the domestic gold price. This is also the highest difference ever.

Investors should be cautious

The rapid increase in gold prices in a short period of time poses risks to investors who buy at high prices. The difference between buying and selling is widening, which can cause buyers to lose money right after the transaction. In addition, domestic gold prices are currently more volatile than international prices, so if the international market has a correction, the risk of a price drop in the country is even greater.

Mr. Nguyen Quang Huy, Executive Director of the Faculty of Finance and Banking, Nguyen Trai University, said that instead of following the mentality of "prices will increase further," investors should carefully consider their goals and financial capabilities, and only allocate a reasonable portion to gold for long-term accumulation. In the short term, one should be cautious about buying gold for "surfing" because strong fluctuations can bring profits but can also easily lead to heavy losses.

According to Mr. Huy, abolishing the monopoly and allowing commercial banks to participate in gold bar production has strategic significance, contributing to creating competition, diversifying supply sources and moving towards a more stable market.

"However, these impacts are not immediately evident in the short term. Licensing, building production lines, organizing supervision and especially building social trust require a certain amount of time. Therefore, during this period, the market psychology of gold being rare and prices going up still dominates people and investors, causing gold prices to continue to climb and the buying-selling gap to widen," said Mr. Huy.

According to the expert of the Director of the Institute for Strategy and Competitiveness Research, the price of gold fluctuates strongly because it depends on the international economic and political situation. Recently, the price of gold has increased, continuously creating new "peaks" due to the influence of geopolitical conflicts in the world and the US tariff policy, making gold a safe haven for investors.

The expert also warned that the US dollar is currently weakening against major currencies. Meanwhile, gold is priced in US dollars, which leads to investors switching to gold, contributing to the increase in gold prices.

Mr. Nguyen Quang Huy acknowledged that money tends to withdraw from production and business to find a safe haven in gold. If this phenomenon continues to last and spread, it will not only cause imbalance in the social investment structure but also increase the risk of “goldenization” of the economy, something the Government has been trying to control for many years.

World gold prices set a new record amid expectations that the US Federal Reserve will cut interest rates. Photo: Vietnam+

Gold prices have been fluctuating constantly, surpassing experts’ predictions. And will continue to be unpredictable in the coming time when the world’s geopolitical situation remains uncertain.

Globally, gold prices have broken a new record for the first time since April. Analysts say prices will rise further in the medium term as confidence in the US dollar wanes.

Gold prices have been moving sideways for months, but are now hitting records again. On September 2, gold prices surpassed $3,500 an ounce for the first time since April, followed by a new high of nearly $3,569 an ounce on September 3.

Gold prices have broken records 30 times since the beginning of this year and many analysts believe the precious metal has more to go. Experts at Morgan Stanley predict the possibility of gold prices continuing to rise by another 10%, reaching $3,900 an ounce.

Commerzbank believes that $3,600 an ounce is achievable by the end of the year. UBS analysts have also raised their gold price target to between $3,600 and $3,700 an ounce.

Gold prices hit a new record as expectations of a rate cut by the US Federal Reserve and concerns about the future of the central bank fueled the rally.

PV (synthesis)

Source: https://baohaiphong.vn/gia-vang-trong-nuoc-dat-dinh-moi-chuyen-gia-canh-bao-nguy-co-mua-dinh-519923.html