Gold prices are currently showing signs of decline, and experts warn that forecasts for the precious metal is unpredictable at best.
Vietnam Gold Investment and Trading Corporation chairman Tran Thanh Hai said it was not easy for short-term traders to earn profit from gold trading right now.
Those who are seeing good results are traders who bought gold when the price was between 26.25-27.75 million dong per ounce ($1,140-$1,200).
Ending the first week of September, selling prices on Friday ranged from between 31.67-35.25 million dong per ounce at the two largest gold trading firm Bao Tin Minh Chau and SJC.
The price levels were down about 375,000 dong per ounce from those recorded on August 30 – the last trading day that month.
On international markets, gold dropped 0.83 per cent on Friday to trade at $1,512.80 per ounce.
In the last three months, domestic gold prices had surged but trading had gone quiet, business insiders said.
The number of buyers was almost unchanged in the first week of this month compared to the previous week, they said.
People sold more than they bought, forcing gold companies to lower their buying prices to prevent selling, they added.
Banking experts said that gold was no longer an attractive investment, especially when commercial banks were offering high saving interest rates – which is considered safer and more profitable at the moment than gold.
As a result, banks are not paying attention to buying gold, leading to the decline of gold traders and investors at the bank, according to the experts.
Sales of gold and gold products in the last two months were up only one to two per cent compared to the previous period, Nguyen Hoang Minh, deputy governor of the State Bank of Vietnam’s Ho Chi Minh City branch, told local media.
The modest increase indicated demand was growing slowly despite strong gains in both domestic and international markets, he said.
“Financial institutions have suspended gold lending and borrowing for years,” Minh said.
“The amount of gold available for lending is quite negligible. The central bank’s Ho Chi Minh City office has kept up with the movement of gold prices to deliver proper responses but actual demand and sales of gold and gold products are quite weak.”
In the remaining months of the year, international gold prices might not reach $2,000 an ounce while it might continue falling in a short period before going again in medium and long terms, investment consultant Phan Dung Khanh at Maybank Kim Eng Securities Co said.
Gold might move between $1,500-1,600 an ounce or 31.5-33.75 million per ounce. It was unlikely that gold would soar in the remaining period of the year, he said.
But the future movement of gold prices was still uncertain, analysts have said. Investors should not jump in the gold market at the moment especially if they had not kept a close watch on the gold prices. VIET NAM NEWS