According to experts, the phenomenon of domestic SJC gold bar and gold ring prices being lower than the converted world gold price on February 12 and 13 is quite rare. Why does this phenomenon occur, and how will the gold price develop?
The reason why domestic gold price is sometimes lower than world price
In the past two days, domestic gold prices have had some "strange" developments when, for the first time in many years, the price of SJC gold bars and gold rings was lower than the converted world gold price.
Specifically, from the afternoon to 8:00 p.m. on February 12, the world gold price was 2,885 USD/ounce, equivalent to 90.4 million VND/tael. Meanwhile, the domestic price of SJC gold bars and gold rings was 90.2 million VND/tael (selling); 200,000 VND/tael lower than the world price.
By the afternoon of February 13, the world gold price was at 2,912 USD/ounce. World gold converted to the bank USD price was at 90.9 million VND/tael. Meanwhile, the domestic SJC gold price was 90.7 million VND, also 200,000 VND/tael lower than the world price.
Regarding the developments of the domestic gold market, sharing with VietNamNet reporter, gold expert Tran Duy Phuong said: For about a week now, the demand for gold has been low, the psychological factor of fearing that investing at this time will be risky has caused many people to not buy but sell to take profit.
According to Mr. Phuong, supply is greater than demand; the price is too high so not many people invest; from there, the domestic gold price does not increase as fast as the world gold price, so there are times when the price is lower.
“The phenomenon of domestic SJC gold bar and gold ring prices being lower than the converted world gold price on February 12 and 13 is quite rare,” Associate Professor Dr. Ngo Tri Long, an economic expert, told VietNamNet.
According to the expert, this could be due to a number of reasons such as: domestic supply-demand gap, decreased purchasing demand; impact from world gold prices; market regulation policies of the State Bank; exchange rate fluctuations...
Specifically, according to Mr. Long, after the Lunar New Year, people's demand for gold for storage decreased sharply, while the supply from investors increased, causing domestic gold prices to no longer remain high compared to world gold. World gold prices increased sharply in the past two days due to factors such as concerns about inflation in the US, geopolitical tensions and safe haven demand.
“The State Bank may have taken regulatory action to stabilize the gold market, especially in the context of strong fluctuations in world gold prices. Previously, SJC gold often had a difference of more than VND10 million/tael compared to the converted world gold price, but now this gap has narrowed, sometimes even lower.
If the USD/VND exchange rate decreases, the world gold price converted to VND will be higher, making the domestic gold price appear lower than the world price. According to data from the State Bank on February 13, the USD selling rate has decreased slightly compared to the beginning of the month, contributing to the world gold price being higher than normal," Associate Professor Dr. Ngo Tri Long analyzed.
However, according to Mr. Long, the phenomenon of domestic SJC gold bar and gold ring prices being lower than converted world gold prices may only be temporary, because if gold demand increases again, domestic gold prices may continue to have a positive difference compared to world prices.
What will happen to gold prices next?
According to gold expert Tran Duy Phuong, domestic gold prices will hardly decrease sharply, and will likely increase again.
“The domestic gold price being lower than the world price is only temporary for a short period of time, about 1 week to 10 days; it cannot be maintained for a long time. If the world gold price remains stable in the next few weeks, the domestic gold price will increase,” said Mr. Phuong.
However, according to the expert, the world gold price still has the potential to fall sharply, possibly to 2,700 USD/ounce before rising again. Therefore, at this time, many people are afraid to buy gold, not daring to take risks.
“Domestic gold prices will remain stable if world gold prices decrease slightly or relatively. If world prices decrease sharply, about 100-200 USD/ounce, domestic prices will also decrease.
For example, if the world price drops by about 50 USD/ounce, the domestic price will only drop by about 500,000-700,000 VND/tael instead of about 1.5 million VND/tael; it will not drop sharply following the world price, from the current level of about 200,000-300,000 VND/tael lower; it will pull up to 300-500,000 VND/tael higher. From this point onwards, the ring gold price will increase and decrease following the world price. If the world gold price continues to increase, the domestic price will increase sharply to pull the negative difference to equal or positive," Mr. Phuong analyzed.
He also noted that domestic gold prices lower than world prices have happened in the past but not for long. Low prices will make investors' psychology of buying gold return.
“If the world price does not decrease sharply in a few weeks, there is a high possibility that domestic buying power will return and increase again. However, the difference will not be much, only 200,000-300,000 VND/tael higher than the world price, not a few million VND difference like before,” Mr. Phuong added.
"This also shows that the solutions and policies to stabilize the gold market in recent times by the State Bank and functional agencies have also played a role. This is the success of the economic management policy of the Government and the State Bank. The fact that domestic prices are only 1-2 million VND/tael different from world prices is acceptable," Mr. Phuong assessed.
Gold price today February 14, 2025: World price increases rapidly, gold rings and SJC escalate
Gold price today February 13, 2025 increased sharply, SJC and gold rings jumped to nearly 91 million
Gold price today 2/12/2025 dropped dramatically, SJC gold and rings were blown away by more than 1 million
Source: https://vietnamnet.vn/chuyen-gia-ly-giai-ve-dien-bien-la-cua-thi-truong-vang-trong-nuoc-2371239.html
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