Non-SJC gold is the most profitable, SJC gold is the least profitable
The price of SJC gold increased crazily in the last days of 2023, giving investors the opportunity to earn a few million VND/tael in just 1 day. However, the beautiful moment did not last long because after December 26, SJC gold recorded a main trend of... "free fall".
On the last day of 2023, the gold market was quite "chaotic" when gold and silver companies listed SJC gold prices at levels with very large differences.
Bao Tin Minh Chau Gold and Silver Company and Saigon Jewelry Company – SJC have quite similar listed prices, respectively 71.10 million VND/tael – 73.90 million VND/tael and 71 million VND/tael – 74 million VND/tael. Phu Nhuan Jewelry Company listed SJC gold price at: 70 million VND/tael – 73.9 million VND/tael.
Meanwhile, Doji Group recorded the lowest buying price in the market but the highest selling price in the market. SJC gold price in Hanoi market is traded at: 68 million VND/tael - 74 million VND/tael, in Ho Chi Minh City market is bought and sold at: 70 million VND/tael - 75 million VND/tael.
In 2023, the profitability of SJC gold is much lower than that of non-SJC gold. Photo: Hoang Tu
Compared to the last session of 2022, the price of SJC gold has increased by 7 million VND/tael, equivalent to 10.45%. However, due to the large difference between the selling and buying prices of SJC gold, after 1 year of trading, investors only enjoyed a profit of 4 million VND/tael, equivalent to 5.97%.
The profitability of SJC gold is much lower than that of non-SJC gold. At the end of 2023, the price of Thang Long Dragon gold at Bao Tin Minh Chau stopped at: 62.08 million VND/tael - 63.28 million VND/tael, an increase of 9.4 million VND/tael, equivalent to 17.4% compared to the end of 2022.
Because the difference between the selling price and the buying price changed little, at 1.3 million VND/tael, investors earned a profit of 8.2 million VND/tael, equivalent to 15.2%.
It can be seen that in 2023, non-SJC gold has the potential to generate nearly 3 times more profit than SJC gold. SJC gold price even has a lower growth rate than world gold.
World gold has its most positive year since 2020
In the last session of 2023, the world gold price traded stably and stopped at nearly 2,072 USD/ounce thanks to hopes that the US Federal Reserve (Fed) could cut interest rates as early as March.
Spot gold prices stopped at $2,062.59/ounce, unchanged from the previous session. US gold futures fell 0.6% to $2,071.80, ending the year 13.45% higher to secure the first positive year in three years. Thus, world gold has the potential to yield nearly 2.5 times higher than SJC gold.
“The ship is moving towards calmer waters, so to speak – a lower interest rate environment, which means a lower dollar, and so gold will do better,” said Marex analyst Edward Meir.
Gold investors are predicting record high prices next year, as the fundamentals of a dovish US interest rate pivot, continued geopolitical risks and central bank buying are expected to support the market.
“To see higher levels, we need to see stronger demand from investors, such as an increase in ETF inflows,” said UBS analyst Giovanni Staunovo, adding that weaker US economic data and lower inflation were needed for the Fed to appear more dovish.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar.
Gold investors are predicting record high prices next year, as dovish US interest rate fundamentals, continued geopolitical risks and central bank buying are expected to support the market after a volatile 2023.
“Following a surprisingly strong performance in 2023, we see gold prices continuing to rise in 2024, driven by a series of hedge fund dynamics, continued steady central bank purchases of physical gold and, not least, renewed demand from ETF investors,” said Ole Hansen of Saxo Bank.
World gold has the potential to generate profits nearly 2.5 times higher than SJC gold. Illustrative photo
Gold hit a record high of $2,135.40 on December 4 on bets that U.S. monetary policy will ease as early as 2024 after seeing a dovish bias from Fed Chairman Jerome Powell, surpassing the previous record set in 2020.
The precious metal entered virtually uncharted territory in May of this year as the US banking crisis unfolded. By October, it had fallen to near $1,800 an ounce until safe-haven demand sparked by the Israel-Hamas conflict sparked another rally.
Investors returned to the popular SPDR Gold Shares exchange-traded fund, which had inflows of more than $1 billion in November.
A Reuters poll in October forecast prices would average $1,986.50 in 2024. The average price has been above $1,950 so far this year, higher than any previous annual average.
JP Morgan sees a “breakout rally” in gold by mid-2024, targeting a peak of $2,300 on expected rate cuts. UBS forecasts a record $2,150 by the end of 2024 if the cuts materialize.
The World Gold Council, in its 2024 outlook, predicts that a cut of about 40 to 50 basis points in longer-term interest rates, following a 75-100 basis point rate cut, could send gold up 4%.
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