In mid-March, the domestic gold market witnessed an unprecedented fever when SJC gold bars and 9999 gold rings simultaneously reached 100 million VND/tael. However, the increase did not last long. Just one day after reaching its peak, gold prices have fallen sharply by 2-4 million VND/tael.
By the morning of March 22, SJC gold bars continued to fall to VND97 million and may decrease further as the market entered an adjustment period due to strong profit-taking pressure. This "shocking increase and decrease" has caused many investors to buy peaked during the recent fever and suffered heavy losses in just a few days.
Why did gold prices increase dramatically and reverse?
The main reason for the spectacular breakthrough in gold prices comes from the world market. From the beginning of 2025 to mid-March 2025, world gold prices will increase by about 430 USD/ounce, equivalent to more than 16.4% - a strong increase in just over 2 and a half months - thanks to concerns about prolonged inflation, the possibility of the US Federal Reserve (FED) cutting interest rates, and geopolitical instability. At the same time, a weakening USD also makes gold more attractive as a safe-haven asset.
Dr. Chau Dinh Linh - financial expert and lecturer at Ho Chi Minh City Banking University - analyzed: "Gold has long been considered by Vietnamese people as a safe haven for property. In the context of a volatile world, tax policies and regulations from major countries can put pressure on international gold prices to increase. This is combined with the habit of hoarding gold among the people, causing domestic gold prices to increase more strongly".
In addition to the world factor, the domestic market also contributes significantly. Bank deposit interest rates have fallen to low levels, causing many people to seek gold as an alternative investment channel. In the past 3 weeks alone, 23 banks have continued to reduce deposit interest rates by 0.1-0.3 percentage points, many large banks have only reduced the 12-month term to 4.9-6%/year. In addition, the FOMO mentality (fear of missing out) also makes people rush to buy gold, especially when prices continue to increase continuously. Notably, during peak days, many large gold shops in Hanoi and Ho Chi Minh City have had people lining up to buy, while businesses limit sales or tighten the quantity purchased.
According to Dr. Linh, the domestic gold supply is currently limited due to the strict management policy of raw gold imports and the State's control of SJC gold bars. This imbalance between supply and demand contributes to the domestic gold price increasing higher than the world gold price, sometimes the difference is up to more than 5 million VND/tael.
The combination of the above factors makes domestic gold prices increase faster than the increase rate of world prices. From the beginning of 2023 to the beginning of 2025, gold rings have increased by about 85%, SJC gold has increased by nearly 50%, the profit is much higher than savings (only ~7-8%/year).
However, when speculative psychology cooled down, along with signs of adjustment in world prices, profit-taking began to appear, pushing gold prices down. Those who were "at the top" in the previous few sessions fell into a state of confusion. Many people have to accept selling at a lower price to cut losses.
Gold is not for every investor
Although gold is risk-off, Dr. Chau Dinh Linh emphasized: The sharp increase in gold prices makes many people think that this is an attractive investment channel. But it is important to remember that investing always comes with risks. Before spending money, investors need to consider the holding time, investment goal, risk tolerance and especially the difference between buying and selling prices".
Dr. Linh also noted the difference between gold types: SJC gold bars have brand factors, are more widely accepted and have higher liquidity than gold rings despite the same 9999 content. Therefore, gold bars often have higher prices. However, when the market is volatile, the difference between buying and selling is pushed up, investors are easily "losing when coming in, getting out and getting stuck".
Another aspect that experts mentioned is the psychology of holding gold among the people. According to Associate Professor, Dr. Pham Manh Hung - Deputy Director of the Institute of Banking Science - Banking Academy: Vietnamese people tend to hold gold not only for jewelry purposes but also to prevent risks, especially inflation risks. The underlying reason is that the domestic financial market is not diverse enough to provide alternative investment products".
Mr. Hung said that in order for people to reduce their dependence on gold, it is necessary to promote the development of more legitimate, safe and flexible financial investment channels. Financial products such as fund certificates, prestigious corporate bonds, investment-linked savings or products associated with long-term goals such as pension insurance need to be promoted. Even in developed countries, people can invest in climate risk protection products, natural disasters, and weather derivatives - something that Vietnam currently does not have".
Investing in gold without knowledge can easily fall into a cycle
The gold fever in early 2025 once again revived memories of 2011, when a series of buyers at the peak had to wait a decade to get their capital back. Experts warn that lack of financial knowledge will cause investors to repeat old mistakes.
Financial education - the key to escape the vicious cycle
After more than a decade, the psychology of crowd investing has not changed much. Many people still believe that gold is an absolute safe "shelter", but in reality, gold prices have also decreased sharply at times. If buying at the wrong time, investors may have to wait decades to recover capital. According to Associate Professor, Dr. Pham Manh Hung (photo), to avoid the "golden psychological trap", people need to be equipped with basic financial knowledge and know how to compare risks and profits between investment channels.
The gold fever in 2011 is clear evidence: SJC price exceeded 49 million VND/tael, sometimes approaching 50 million VND/tael, then plummeted around 35 million VND for many years, causing those who were "at the peak" to wait until 2020 - 2021 to see the price return to the capital zone.
By 2025, although gold management has tightened (the country has a monopoly on producing SJC gold bars, banks are not allowed to mobilize gold), a new fever is still breaking out, pushing prices above 100 million VND/tael. When prices adjusted, panic led to massive sell-offs, causing prices to decrease rapidly after just a few sessions.
Associate Professor, Dr. Hung warned that if we continue to maintain the mindset of "seeing above is buying" and lack alternative investment channels, the gold market can repeat the 2011 scenario at any time. He proposed diversifying financial products such as fund certificates, safe-haven corporate bonds or flexible savings with insurance, to help people have more options, not putting too much into gold.
Regulating the gold market: Long-term policies are indispensable
Not only stopping at the individual perspective, experts also believe that it is necessary to review the mechanism for regulating the gold market. Some notable proposals include: Loosening the import of controlled raw gold and building an official gold exchange, where people can trade gold through accounts instead of storing materials.
Associate Professor, Dr. Ngo Tri Long - former Director of the Institute of Price Research (Ministry of Finance), emphasized our view that we really need to comprehensively amend Decree 24 to manage the gold market more effectively.
According to him, the State Bank's monopoly on importing gold bars is causing a lack of competition in the market, creating a large gap between domestic and world gold prices. Therefore, he proposed that businesses that are eligible to import gold should be allowed to import gold, thereby stabilizing supply and demand and dragging domestic gold prices closer to international prices.
Along with that, experts emphasized the need to consider opening a gold trading floor, allowing trading in account gold and derivative gold to diversify investment channels, limiting physical gold transactions among the people. He also noted that the fight against "golding" cannot rely solely on administrative measures, but requires modern financial instruments such as gold certificates and futures contracts.
Associate Professor, Dr. Ngo Tri Long warned that it is necessary to carefully consider the proposal to tax gold transactions, because if not reasonable, it will cause people to hoard gold, not put it into circulation, causing waste of resources. According to him, gold management policies need to be flexibly adjusted, close to reality to ensure market stability and financial safety. Quoc Huy
