Vietnamese who rushed to buy gold while prices repeatedly soared over the last two weeks are beginning to regret their investments after sudden unexpected price collapses on July 7.
Vietnam’s gold price had continued going against the global trend on July 7. On the world’s market, gold closed the day at US$1,364.3 an ounce, or VND36.75 million a tael (37.5 grams).
The gap between Vietnamese and global gold prices thus narrowed to only VND750,000 a tael, compared to the huge difference of VND2.75 million per tael the previous day.
The precious metal opened July 8 at high rates, peaking VND40.5 million (US$1,808) a tael shortly after the opening, encouraging more people to buy in.
However, by the end of July 7’s session, prices had dropped to VND37.5 million (US$1,674) a tael, leaving those who bought gold in the morning at a VND3 million (US$134) loss per tael.
Experts say it was the strongest fluctuation of gold prices in recent years. Thursday’s closing price was also VND2.2 million (US$98) lower than that of Wednesday.
After peaking VND40.5 million a tael, the price on July 7 began a steady drop, picking up downward speed as the day wore on.
People who had bought gold at much lower prices thus rushed to sell before they could incur a loss.
However, some were unfortunate and were not able to sell in time.
A resident in Binh Thanh District, Ho Chi Minh City, had rushed to the nearest gold shop with gold she bought at VND36.5 million (US$1,629) a tael, only to see price had dropped back down to the break-even point.
Those who bought the precious metal at VND38 million or VND39 million a tael remain with temporarily losses until prices rise high enough to recoup investments.
Experts said the latest fluctuation of gold prices in Vietnam cemented the comment that consumers are affected by a psychological factor in their gold investment.
The State Bank of Vietnam (SBV) has announced that it has enough gold reverses to intervene and stabilize the gold market if needed, which experts said helped to ‘calm down’ gold holders.
“The public has been reassured by the central bank’s statement, which also cooled down their gold-buying spree and stabilized the market,” said Nguyen Hoang Minh, deputy director of the Ho Chi Minh City branch of the SBV.
SBV says it will work with police to identify if anyone has created a false impulse to boost gold prices, Minh added.
“If so, we will strictly sanction those involved, to make sure no more ‘gold fever’ takes place,” he asserted.