Why does domestic gold price keep increasing?

DNVN - In fact, the high price of domestic gold is due to demand exceeding supply. The demand for domestic gold is on the rise due to the psychology of gold buyers being affected.

On the morning of April 11, the price of gold rings suddenly dropped sharply by about 1 million VND/tael after a series of days of "vertical" increase, while the price of SJC gold bars suddenly skyrocketed.

At Saigon Jewelry Company, SJC gold bars were listed at 82.6 - 84.6 (buy - sell), an increase of 400,000 VND compared to the opening price of the session. The difference between buying and selling prices remained at 2 million VND/tael.

At Bao Tin Minh Chau, the price of SJC gold bars is trading around 82.25 - 84.15 million VND/tael (buy - sell). The price of round gold rings is trading around 75.68 - 77.48 million VND/tael (buy - sell), down about 800,000 VND compared to the closing price yesterday.

World gold prices also tend to decrease. At 10:30 a.m. (Vietnam time), the international gold price was trading around 2,344.69 USD/Ounce. The world gold price decreased by 0.43% in the past 24 hours, equivalent to a decrease of 10.20 USD/Ounce.

Experts say the gold market could still "shake" strongly over the weekend.

However, experts say the gold market can still "shake" strongly during the weekend. Investors need to closely monitor the gold market's developments hourly to make reasonable buying and selling decisions, avoiding big losses when buying gold at peak prices and selling when gold is "plunging".

Sharing about the "shake" of gold prices, Mr. Nguyen Ba Hung - Chief Economist of the Asian Development Bank (ADB) said that gold is a risk management tool when there are major geopolitical fluctuations. Recent geopolitical tensions have caused central banks of some countries to actively buy gold for reserves.

According to Mr. Hung, although not linked to the world gold price, the domestic gold price has been "dancing" continuously in recent times. Some domestic experts believe that the continuous increase in gold price without intervention can lead to gold smuggling, loss of tax revenue, impact on exchange rates and foreign currency loss.

“The increase in world gold prices also partly affects domestic gold prices, however, this is only a small factor. In fact, the increase in domestic gold prices is due to demand exceeding supply. The demand for domestic gold is on the rise due to the psychology of gold buyers being affected.

At the same time, low savings interest rates are also causing investors to switch to gold for investment," Mr. Hung said.

The ADB chief economist stressed that the Government needs more tools to manage gold. Currently, Vietnam still considers gold a “special” commodity, so the management process is also “special”.

“I think the Government should consider gold as a monetary tool, a financial product and also a basic commodity. Therefore, there should be management solutions that can harmonize these factors so that management will be more effective,” Mr. Hung recommended.

Ha Anh

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