Vietnamese investors are lining up outside state-owned banks in Hanoi and Ho Chi Minh City to purchase gold bullion at prices lower than those in the domestic market. This surge in demand follows a move by the Central Bank of Vietnam to bring domestic gold prices in line with global benchmarks by selling gold directly to state-owned institutions like Saigon Jewelry Company (SJC) and others for resale to the public. The program allows banks to offer gold bullion at a 1.2% discount compared to current market prices, which are currently at $3,107 per tael.
The spike in domestic gold prices to record highs last month, reaching $3,620 per tael, prompted the central bank to investigate the source of the price disparity. Some experts suggest that the weakening Vietnamese dong could be a contributing factor. Investors seeking a safe haven for their assets are turning to gold, known for its price stability, amid global geopolitical tensions. This trend mirrors the worldwide rise in gold prices this year.
China has also been accumulating gold, with the private sector importing 543 tons of gold in the first quarter of the year. The country’s central bank added 189 tons to its reserves during the same period. Private gold demand in China increased by 74% from the last quarter of 2023, while the central bank’s accumulation rose by 38%. These factors helped drive the price of gold to a new all-time high, surpassing $2,450 for the first time in history before undergoing a slight correction to trade at $2,330.
The increasing demand for gold in Vietnam and China highlights the attraction of the precious metal as a safe investment during times of economic uncertainty and geopolitical tensions. With gold prices reaching record highs globally and domestic banks offering discounts on gold bullion, investors are flocking to gold as a store of value. The stability and long-term growth potential of gold make it an appealing asset for individuals and institutions looking to diversify their portfolios and hedge against market volatility.
As the global economy continues to face challenges and uncertainties, the demand for gold as a safe haven asset is likely to remain strong. Both individual investors and central banks are increasing their holdings of gold, driving prices to new record levels. The trend of purchasing gold at discounted prices from state-owned banks in Vietnam reflects the broader appeal of gold as a valuable and reliable asset in times of financial instability. With ongoing geopolitical tensions and economic risks, gold is likely to continue to attract investors seeking a secure and stable investment option.
The decision by the Central Bank of Vietnam to sell gold directly to state-owned banks at a discount to address the price disparity and align domestic prices with global benchmarks has sparked a rush among Vietnamese investors to purchase gold bullion. The move reflects the growing demand for gold as a safe haven asset in a volatile economic environment. With the price of gold reaching record highs and geopolitical tensions escalating, investors in Vietnam and China are turning to gold as a reliable store of value and a hedge against market uncertainties. The trend of individuals and institutions acquiring gold at discounted prices underscores the enduring appeal and value of gold as a key asset in diverse investment portfolios.
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