Vietnamese gold prices plunge following US election

By RFA Vietnamese2024.11.10

Read more on this topic in Vietnamese.

A sharp selloff in gold by Vietnamese investors in the days after the U.S. presidential election followed by a partial rebound in the price, may have been driven by confusion over what Donald Trump’s victory could mean for the precious metal, market analysts said.

Vietnamese have been gold bulls in recent years, with nearly three quarters of investors holding gold in some form, and eight out of 10 seeing it as a safe haven in times of economic insecurity, according to the World Gold Council.

In the first quarter of this year, Vietnam registered the strongest three-month demand for gold bullion and coins since 2015, the council said, fueled partly by the Vietnamese dong’s depreciation against the dollar.

But on Nov. 7, bullion prices dropped by more than 5%, state media reported, rising just over 1% the following day. On Thursday alone, there were more than 1 million Google searches for “today’s gold price” by users in Vietnam.

An economist and veteran journalist in Hanoi, who did not want to reveal his identity due to the sensitivity of the issue, told Radio Free Asia that people rushed to sell gold on Thursday due to panic over the market implications of Trump’s victory.

“The reason investors rushed to sell gold is because of the state of confusion about which direction the gold price will go, not because investors are selling to take profits,” he said.

The economist said authorities had done little to educate investors about the state’s role in regulating prices, while gold and currency experts had remained silent as they tried to make profits.

The State Bank of Vietnam tightly controls gold manufacturing and trading but does not oversee all aspects of the booming market.

“There is a thriving underground market to meet the demand of about 50-60 tonnes of gold per year,” likely to increase to as much as 80 tonnes a year in the next five years, according to the World Gold Council.

Gold price volatility is likely to calm down this year, the economist told RFA. On the other hand, he said the U.S. dollar was likely to fluctuate against the Vietnamese dong because many Vietnamese companies have to buy foreign currency to pay off loans at the end of the year.

With gold perceived as a safe investment in times of geopolitical turmoil, one investor told VNExpress he expected gold prices to fall because he thought Trump would bring a speedy end to Russia’s war in Ukraine.

However, Huynh Trung Khanh, deputy chairman of the Vietnam Gold Traders Association, told the news site gold speculators shouldn’t be overly optimistic.

“Although investors expect Donald Trump to handle geopolitical tensions swiftly, these are matters that cannot be resolved overnight.”

Translated by RFA Vietnamese. Edited by Mike Firn.