Buying gold in anticipation of the God of Wealth Day?
The price of gold bars at Saigon Jewelry Company (SJC) last weekend was 75.6 million VND/ounce for buying and 78.1 million VND/ounce for selling. Compared to the previous week, each ounce of gold bar increased by 1.4 million VND. Meanwhile, SJC's 9999 gold rings were bought at 63.2 million VND and sold at 64.4 million VND, an increase of 450,000 VND.
Buy gold rings and wait for the price to increase around the God of Wealth Day after the Lunar New Year of the Dragon 2024.
Mr. Huynh Anh Tuan (General Director of Dong A Bank Securities Company)
Currently, each SJC gold bar is priced 13.7 million VND higher than gold rings of the same brand. The difference between the buying and selling price of SJC gold rings continues to remain at 1.2 million VND/ounce, while this difference for gold bars is 2.5 million VND.
Over the past two weeks, SJC gold bars have increased by nearly 2 million VND per tael, while SJC 9999 gold rings have risen by 550,000 VND. However, those who bought gold bars two weeks ago would still lose more than 1 million VND per tael if they sold them now, due to the consistently large buy-sell price difference of 3 million VND. Meanwhile, those who bought SJC 9999 gold rings during the same period would lose approximately 750,000 VND per tael because the buy-sell price difference was smaller.
The gold market is currently calm, but after the Lunar New Year holiday comes the God of Wealth Day (the 10th day of the Lunar New Year), and typically, gold prices rise during this period due to increased demand. So, is it a good idea to buy gold before the Lunar New Year?
According to financial expert Phan Dung Khanh, the future price of SJC gold bars remains uncertain as the market awaits the State Bank of Vietnam's management policies. In fact, at the end of 2023, when the government requested a review and reconsideration of gold market management policies to avoid price discrepancies with global prices , SJC gold bars experienced a sharp decline. Therefore, no one can predict the future price of SJC gold bars because it doesn't follow global price fluctuations.
Many believe that while buying gold bars is risky, buying 9999 gold rings offers a chance for profit, waiting for price increases on the God of Wealth Day. However, in recent years, gold and jewelry companies and stores have resorted to tactics such as significantly increasing selling prices while only slightly or not increasing buying prices at all. This leads to a potentially large difference between the buying and selling prices of gold rings. This is the biggest risk for gold buyers today.
"Buying 9999 gold rings now, if only for short-term holding and waiting for the God of Wealth festival, will only be profitable if world gold prices rise sharply. However, in the first quarter of 2024, the US Federal Reserve (Fed) has expressed its stance against lowering interest rates, and the probability of this happening is only in June, so the price of the precious metal will not fluctuate much. Therefore, buying gold for short-term investment also carries quite a lot of risk," Mr. Phan Dung Khanh shared.
Meanwhile, Associate Professor Nguyen Huu Huan from the University of Economics Ho Chi Minh City believes that gold prices usually increase closer to the God of Wealth Day due to high demand. The demand for physical gold at that time increases not only in Vietnam but also in China. Consumption in the world's most populous country also impacts global gold price fluctuations. Therefore, when demand increases, the price of gold is likely to rise. In Vietnam specifically, buyers wanting to profit during the God of Wealth Day should only buy 9999 gold rings because the difference between the world price and the buying and selling prices is lower than that of gold bars, thus reducing risk.
Trading stocks in the active sector.
While there are still many conflicting opinions regarding gold, experts point to another investment channel that could yield profits: stocks. To successfully trade stocks in the next 1-2 months, the most important factor is stock selection.
You can choose stocks that haven't risen in January to make a profit.
Associate Professor Dr. Nguyen Huu Huan analyzed: Investing in stocks also offers opportunities to make profits, but not very large ones if you only intend to "day trade" for 1-2 months. The stock market rose quite a bit in January, with many bank, securities, and industrial real estate stocks increasing continuously, so the probability of a short-term correction is high. Currently, interest rates remain low, which is positive news supporting the stock market.
However, the VN-Index is currently hovering around 1,170 points. If investors expect the market to reach 1,300 points by the end of Q1 2024, they should buy aggressively. Conversely, if investors only expect 1,200 points, the increase is not very high, so they should be much more cautious. In particular, they might consider selecting only a few stocks that haven't increased in the first month of this year but belong to sectors with good growth potential.
Mr. Huynh Anh Tuan, General Director of Dong A Bank Securities Company, is more optimistic, analyzing that in the past 10 years, the stock market has always risen after the Lunar New Year holiday. This is because, before the holiday, many investors, both institutional and individual, withdraw money from the stock market for spending. At the same time, because the holiday lasts more than a week, investors also avoid using borrowed capital due to higher interest rates. Furthermore, investors are concerned that if global stock markets experience significant fluctuations during the holiday, the Vietnamese market might change in the opposite direction after the holiday…
Therefore, right after the Lunar New Year, when investors return to trading, liquidity increases, and many stocks will also trend upwards. Not to mention that at the beginning of this year, many positive pieces of information also supported the stock market, such as low interest rates, some signals of increased orders from export businesses, and the government setting targets for public investment disbursement…
"To seize opportunities after the Lunar New Year of the Dragon, investors can consider buying right before the holiday, but without using borrowed money. I believe some sectors have the potential to grow, such as exports, public investment, and industrial real estate," Mr. Tuan said.
Financial expert Phan Dung Khanh also believes that stocks have a chance to increase in the first quarter of 2024, but not significantly. According to the State Bank of Vietnam, deposits from individuals into the banking system reached a record high in 2023. Furthermore, the amount of cash deposited into banks in the last two months of 2023 remained quite high despite the significant drop in savings interest rates. Therefore, the likelihood of significant capital outflows from banks to investment channels like stocks in the first month of this year is unlikely.
"Stock markets will only start to rise from mid-2024 when the global economy clearly recovers and the US begins to lower interest rates. From there, Vietnam's exports will also recover, and domestic consumer demand will also gradually pick up again...", Mr. Khanh predicted.
Real estate does not offer opportunities in the short term.
Regarding real estate, a familiar and traditional investment channel for Vietnamese people, financial experts generally agree that the market is still facing many difficulties and is unlikely to recover in the short term to the levels seen in Q1 2024.
Associate Professor Dr. Nguyen Huu Huan believes that the real estate market is a story for 2-3 years from now, not for 2024. However, if investors have capital, they can still consider buying this year because real estate prices are currently at their lowest point. But when the market will emerge from this bottom will be a long-term question.
Sharing the same view, expert Phan Dung Khanh commented that real estate remains the worst-performing investment channel in the first two quarters of this year. However, in the long term, it could be the best investment channel.
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