Closing the trading session on May 31, domestic gold prices simultaneously decreased sharply compared to a week earlier. Notably, although the listed price at some units decreased by about 2.5-3 million VND/tael, gold buyers if sold after a week could lose up to 5.5-6 million VND/tael.
The reason lies in the way gold is traded on the market. When buying gold, people must buy at the selling price of the business. However, when reselling, businesses only buy at the buying price. The gap between these two prices is the difference between buying and selling, which is also the cost that buyers have to bear immediately when making a transaction.
For SJC gold bars, closing the session on May 31, Saigon Jewelry Company SJC listed the price at 156-159 million VND/tael for buying - selling. Compared to a week earlier (closing session on May 24), the price of SJC gold bars at this unit decreased by 2.5 million VND/tael in both directions. DOJI also listed SJC gold bars at 156-159 million VND/tael, down 2.5 million VND/tael compared to the previous week.
If only looking at the price decrease, buyers may think that the corresponding loss is about 2.5 million VND/tael. However, in reality, the loss is much larger. Gold bar SJC buyers in the May 24th session had to buy at the selling price of the enterprise. By the May 31st session, if they resold, they would only receive the buying price. With the buying - selling difference currently at the threshold of 3 million VND/tael, the total loss is up to 5.5 million VND/tael.
This development also occurred with gold rings. At DOJI, gold ring prices closed the week at the threshold of 156-159 million VND/tael, down 2.5 million VND/tael in both directions compared to the previous week. With a buying - selling difference of 3 million VND/tael, gold ring buyers at DOJI lost about 5.5 million VND/tael after a week.
Losses are even greater at Phu Quy Jewelry Group. This unit listed the price of gold rings at 155.5-158.5 million VND/tael, down 3 million VND/tael in both directions compared to the session on May 24. Due to the buying - selling difference still at 3 million VND/tael, gold ring buyers at Phu Quy if they bought last week and sold last weekend would lose up to 6 million VND/tael.
Thus, the loss of 6 million VND/tael does not only come from the fact that gold prices decreased by 3 million VND/tael, but also plus 3 million VND/tael difference between buying and selling prices. This is a factor that makes short-term gold buyers easily suffer great losses, especially in the context of rapid price fluctuations.
In the world market, gold prices closed the week at the threshold of 4,531.3 USD/ounce, down 29.8 USD compared to a week ago. The downward trend of world gold prices created more pressure on the domestic market.
Reality shows that when the gold market fluctuates strongly, the higher the buying - selling difference, the greater the risk for buyers. People not only face the risk of gold price decrease but also have to bear very large transaction costs if buying - selling in a short time.
People need to be especially cautious with the psychology of fear of missing opportunities (FOMO), chasing purchases when gold prices rise sharply. In the context that the buying-selling spread is anchored at a high level, buyers may fall into losses even if gold prices only adjusted by a few million VND per tael.
Investors should also closely monitor world gold prices, the monetary policy of the US Federal Reserve (Fed), USD fluctuations, bond yields and geopolitical factors before making a trading decision.
