The sudden spike in gold prices has raised concerns, especially for those with little investment experience. While gold is traditionally seen as a safe-haven asset during economic instability, its record-high prices may lead some to believe that this is an opportunity for quick profits.
However, it is crucial to note that there is no guarantee that gold prices will continue to rise. Entering the gold market when prices are already at such high levels can pose significant risks, particularly since gold prices are influenced by macroeconomic factors such as monetary policy changes and fluctuations in international financial markets.
Gold market boom
According to businesses in the gold sector, SJC gold prices have soared since early 2024, hitting 101.5 million VND per tael on March 31 — marking a record high. At the same time, global gold prices also jumped to 3,100 USD per ounce. This surge reflects not only international market trends but also domestic and global economic conditions, particularly inflation and economic instability.
In the international market, analysts attribute the gold price rally to geopolitical tensions, financial crises in major economies, US tariff policies, and central banks worldwide increasing their gold reserves. These factors have driven demand for gold as a safe investment.
Another key driver is the weakening USD and loose monetary policies from major central banks. As interest rates remain low and money supply expands, investors turn to gold as a reliable store of value. This explains the continuous price climb in recent months.
According to financial expert Dr Nguyen Tri Hieu, Vietnam's gold prices are largely driven by global trends. The shortage of domestic supply, low savings interest rates, and a "buy-to-win" mindset have further fuelled the surge, pushing SJC gold and jewellery gold above 101 million VND per tael.
Over the past year, jewellery gold has risen by 30 million VND per tael (up 43%), while SJC gold has increased by 19 million VND per tael (up 23%).
Caution amidst potential risks
While gold is a long-term stable asset, it is not always a safe investment. Experts warn that short-term trading at current prices carries high risks. If gold prices drop suddenly, investors may face significant losses.
The market does not always follow an upward trend. Gold prices fluctuate due to global economic shifts, including central bank policies, especially those of the U.S. Federal Reserve (FED). If the FED raises interest rates to curb inflation, gold may lose its appeal as other investments become more attractive.
For inexperienced investors, entering the gold market at peak prices can be risky. Experts advise caution, as a sharp decline could lead to heavy losses.
