For example, Mr. A has a savings book of 200 million VND at the bank, with a term of 3 months, but the maturity date has not yet come. When he sees the price of gold increase, Mr. A wonders whether he should invest in gold or not? And if he invests, should he buy gold bars or gold rings?
According to financial expert Dr. Chau Dinh Linh - Lecturer at Banking University of Ho Chi Minh City, closing savings accounts early to switch to gold investment needs to be carefully considered, especially in the context of strong fluctuations in gold prices. He emphasized that investment is a calculated process, not just based on "crowd" psychology or the expectation that gold prices will continue to increase.
Closing a savings book: Good or bad?
If Mr. A closes his savings account early, he will not receive the expected 4% interest rate per year, but will only receive a very low non-term interest rate (0.1% - 0.5% per year). This means that instead of receiving about 2 million VND in interest after 3 months, he may only receive a few tens of thousands of VND. This is a significant opportunity cost when deciding to withdraw savings to invest in gold.
According to Dr. Linh, this is a problem that investors must calculate before making a decision. If the gold price continues to increase sharply, the profit from gold can offset the loss from savings interest. But on the contrary, if the gold price decreases or goes sideways, investors can lose both interest and losses from the gold price.
The risks of buying gold at high prices
Dr. Chau Dinh Linh warned that gold prices are not only affected by domestic supply and demand but also strongly affected by geopolitical factors and global economic policies. He analyzed some of the main risks when investing in gold:
First, about price fluctuations: If the gold price drops, investors may suffer significant losses. For example, if the gold price drops by just 1 million VND/tael, the investment amount can evaporate by about 4 - 5 million VND. Especially, if the gold price is at a record high, the possibility of a downward adjustment is very high.
Second, about the difference between buying and selling prices: In Vietnam, the difference between buying and selling gold prices is often higher than in the world market.
Depending on the time, SJC gold bars have a difference of 1.5 - 3 million VND/tael; Gold rings have a difference of 400,000 - 2.8 million VND/tael.
This means that right after buying gold, if sold immediately, the investor has suffered a significant loss.
Third, about liquidity: Although gold has high liquidity, compared to savings, gold cannot be withdrawn quickly with the expected profit. Investors may have to wait for high prices to be able to sell at a profit.
Should I buy gold bars or gold rings?
If you still decide to invest in gold, investors need to consider the following factors between gold bars and gold rings:
SJC gold bars:
Considered safer, highly stable and favored by large investors.
However, the price of gold bars is often higher than world gold, due to limited supply.
High buy-sell spread, causing disadvantage in liquidity.
Gold ring:
Previously, the buying and selling price difference was lower than gold bars, suitable for short-term investment.
But recently, the difference has increased sharply, at times equal to that of gold bars.
Dr. Chau Dinh Linh said that although gold rings have the same 9999 gold content as gold bars, SJC gold bars have higher brand value and liquidity. Moreover, SJC gold is managed by the State Bank, so when it is necessary to stabilize prices, this agency can intervene to avoid too large a difference compared to world prices.
On the contrary, gold rings are not subject to price stabilization by the State Bank, leading to prices that can fluctuate strongly according to market supply and demand.
So, should I close my savings account to buy gold?
Thus, if people invest long term (over 1 - 2 years), they can consider taking out a small portion (30 - 50% of the amount) to buy gold. SJC gold bars may be a better choice due to higher liquidity.
If you want to "surf" in the short term, this can be a risky decision, because the price of gold is at a record high and can reverse at any time. You need to closely monitor market developments before making a decision.
Dr. Chau Dinh Linh emphasized that investors need to carefully assess their risk appetite before deciding to invest. Closing savings accounts to buy gold may be suitable for some investors, but not everyone can withstand the strong fluctuations of the gold market.
According to Dr. Chau Dinh Linh, the long-term trend of gold is still increasing, but that does not mean that gold prices cannot be adjusted in the short term.
