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SJC gold's 'whirlwind'

The price of SJC gold bars on November 19 plummeted by 1.1 million dong per tael, in contrast to the super-fast increase that took place in the past few days.

Many people call the increase in the price of SJC gold bar "crazy" when domestic demand is low, gold buyers are few, even the market has just gone through a period of distance, causing gold shops to close for a long time; However, SJC gold bar is higher than world gold by a record distance, 10-11 million dong/tael.

SJC gold price is higher than international price up to 10 million dong/tael. Ngoc Thang

Increase or decrease sharply by 1 million VND/tael per day

The price of SJC gold bars on November 19 dropped sharply by 1.1 million dong per tael, in contrast to the super-fast increase that took place in the past few days. Saigon Jewelry Company - SJC bought 59.8 million dong/tael and sold 60.6 - 60.62 million dong/tael; Eximbank (HM: EIB) still had 60 million dong/tael bought in and sold out 60.6 million dong/tael… 

Thus, in just 2 days SJC gold was "blown away" 1.65 million dong per tael. By the end of the day, SJC gold bar recovered and gained 200,000 VND/tael when precious metals in the international market turned to increase from 1,854 USD/ounce to 1,864 USD/ounce.

A representative of SJC Company said that the market had a selling force of several hundred taels, but due to the small size, the price dropped without braking. After that, people did not "ask" much for the transaction. However, it is worth mentioning that even though the demand is not much, even "inquiring" is also small, but the price of SJC gold bars is still increasing. 

Previously, every day the market traded tens of thousands of taels, the price fluctuated up and down sharply, but now it only takes a few hundred volumes to buy or sell, making the price of gold fluctuate unpredictably. Mr. Nguyen Ngoc Trong, Director of New Partner Gold Company (NPJ) said that in the afternoon of November 19, the market had a selling force to take profit of "surfing" people, so the price dropped quickly. 

The selling volume was small, but basically, business units didn't want to buy at a high level of 60-61 million dong/tael, so they pulled the price down. This move shows that the domestic gold market contains too many risks when the price depends a lot on the gold trading units themselves. 

When the world gold price fluctuates, they widen the buying and selling price gap, making it difficult for gold investors to make profits in the session even though they predict the trend correctly. When the price of gold is high, they let the buying price be low. If they want to sell, they have to accept losses.

That is the reason why the domestic gold market is increasingly unattractive to investors even though this is one of the channels with very high liquidity.

Gold is not attractive

According to the State Bank of Vietnam branch in Ho Chi Minh City, sales of gold trading units in the city in the first 10 months of 2021 decreased sharply by 40-41% (sold out - bought in) compared to the same period last year. period last year. Transaction volume is dwindling and only 4 banks have deployed gold holding service in the area. People tend to sell gold to save money in dong over the years.

Over the past 10 years, the giltization of the economy has decreased sharply. In 2011, there were about 300-400 tons of gold in the economy, estimated at 15-20 billion USD, while GDP was about 135 billion USD. 

The volatility of gold price on the market in the past years often affects the economy a lot. There are periods when "gold is also profitable", so many people prefer to hoard gold, for example, from 2001 to 2011, the gold price increased 9 times and 3.5 times higher than the consumer price rate. 

To stabilize the market, the state had to continuously import gold for many years to intervene, such as USD 492 million in 2009, USD 1,106 million in 2010 and USD 2,265 million in 2011. This consumes foreign currency and puts upward pressure on the USD price, leading to an increase in inflation.

After Decree 24 on market management was issued in 2012 until now, banks do not accept gold savings but only keep it (the depositor has to pay a fee). In addition, the gold price tends to decrease, leading to a sharp decrease in the amount of gold held by banks, people tend to sell gold and switch to saving dong.

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