Brian Jeffrey
Record Surge in Gold Prices
Gold has seen a dramatic increase, reaching an astounding $2,838 per ounce globally on February 4. In Vietnam, SJC gold bars rose to 90.1 million VND ($3,570) per tael, with gold jewelry momentarily surpassing this price point. Investors are now left to ponder how much further gold might rise in these uncertain times.
Factors Influencing Gold Prices
The surge in gold prices is heavily influenced by economic policies and global market conditions. Dr. Nguyen Huu Huan from the University of Economics in Ho Chi Minh City emphasizes that investor sentiment is the main driving factor, overshadowing mere policy shifts.
He pointed out that gold values fell over $100 per ounce following the election of Donald Trump due to optimistic forecasts regarding business-friendly policies and a robust U.S. dollar. However, when Trump suggested imposing tariffs on imports from countries such as Mexico and Canada, gold prices climbed as investors anticipated inflation stemming from increased import costs.
“Currently, we are witnessing a similar trend. Initially, there were expectations that protectionist measures would bolster the U.S. dollar, but now there are fears that such tariffs could lead to inflation, which makes gold an appealing safe-haven,” Huan explained.
Moreover, Trump’s recent decision to delay tariffs on Mexico and Canada has increased uncertainty, further contributing to gold market volatility. This has led to rapid price swings, with initial drops rapidly followed by rebounds of several dollars per ounce.
Huan notes that the gold market remains highly unpredictable, as investors are both selling to secure profits and buying out of fear of inflation. This conflict sustains gold prices at historic levels, with no definitive trend emerging.
Seasonal Trends and Local Market Impact
Seasonal demand significantly impacts Vietnam’s gold market, especially during events like the Lunar New Year and the God of Wealth Day (10th day of the first lunar month). Even if global prices decrease, domestic rates are expected to stay high due to tight supply and strict government regulations on gold imports.
Jewelry vs. SJC Gold Bars
Dr. Huan anticipates that prices for gold jewelry in Vietnam may escalate faster than those for SJC gold bars. Unlike the price of SJC gold, which is regulated by the State Bank of Vietnam, gold jewelry prices are determined by supply and demand dynamics.
“It’s possible that jewelry gold prices may temporarily outstrip SJC gold bar prices because of short-term demand surges. However, in actual buying scenarios, SJC gold bars typically retain a price advantage,” he mentioned.
Looking Ahead: Predictions for 2025
Economist Dr. Nguyen Tri Hieu also foresees considerable fluctuations in gold prices in 2025, particularly on a global scale. The main concern revolves around Trump’s proposed tariffs on several countries, which continue to drive investors toward gold as a safe haven amidst financial turbulence.
“The domestic gold market mirrors global patterns and is currently experiencing a resurgence. As international prices rise and supply remains limited in Vietnam, gold prices are likely to keep climbing. Although the State Bank is trying to maintain SJC prices, gold jewelry may see sharper increases,” Hieu predicted.
Investment Strategies Amidst Volatility
With gold prices on the rise, investors are questioning if it’s the right moment to buy or sell. Huan recommends caution, especially for those considering gold as an investment.
“If the purpose of purchasing gold is cultural, such as for Lunar New Year or the God of Wealth Day, acquiring modest amounts (1-2 taels) is acceptable. However, for long-term investors, retaining current gold holdings might be more prudent than entering the market at peak prices,” he noted.
Those who purchased gold before the Lunar New Year have likely seen solid returns, but new investors must be wary since market fluctuations can present substantial risks. Dr. Hieu echoed these sentiments, advising against chasing upsurging prices.
“Investing in gold requires discipline and patience. Making decisions based purely on market sentiment can lead to missed opportunities or losses,” he cautioned.
He further emphasized the importance of defining clear exit strategies: “If you’re holding onto gold, have a plan for when to sell. Delaying too long can result in rapid price drops that could erase profits. Similarly, understanding when to enter the market is vital for buyers,” he added.
As global economic uncertainties, changing U.S. policies, and domestic market shifts continue, analysts anticipate ongoing significant price fluctuations in gold throughout 2025. Investors should strive to remain informed, avoid emotional trading, and make calculated decisions that take into account long-term market trends rather than impulsive short-term speculation.
