Reasons why gold ring prices are soaring, continuously reaching new peaks

According to financial expert Nguyen Tri Hieu, the price of gold rings in particular and the price of gold in general in Vietnam has increased sharply recently, primarily due to the impact of the world gold price continuously setting the most expensive record in history.

In addition, although gold rings are not exclusive, there are many different brands on the market, but the price is still increasingly expensive due to the increase in raw material prices, and at the same time, the input material source has not met the demand because businesses have not been allowed to import gold.

Mr. Hieu emphasized that if the supply of raw materials for gold production does not increase, the price of gold rings will increase further.

Sharing the same view, according to Mr. Dinh Nho Bang, Vice President of the Vietnam Gold Trading Association (VGTA), the shortage of raw gold supply for jewelry and fine arts production has been warned by VGTA since the second half of last year.

Domestic enterprises have two ways to produce gold jewelry and handicrafts, including plain rings. That is to buy back gold according to the sales invoices of enterprises or buy according to the invoices of mining enterprises. The second is to buy gold according to the list of goods and services without invoices, also known as floating gold.

Over the past decade, since the implementation of Decree 24, businesses have not been licensed to import raw gold. Therefore, purchasing gold on the market is the only source for businesses to produce gold jewelry.

But now businesses are also concerned about legal risks as the police arrest more and more smuggled gold, so they have to be more careful when buying raw gold. The cost of buying raw materials is therefore also more expensive.

According to Associate Professor Dr. Dinh Trong Thinh, the recent continuous increase in gold ring prices is due to a sudden increase in the number of buyers.

The price of gold rings is much cheaper than the price of gold bars. With the same content, plain rings are not "labeled" exclusively by the state, through the SJC brand like gold bars. This leads to a difference of nearly ten million VND between each tael of plain rings and SJC gold bars.

The higher the spread, the greater the risk when the market reverses. Therefore, the appeal of gold rings to buyers is greater. "A large number of buyers will make the price increase more and more," Mr. Thinh said.

In particular, according to experts, buyers' psychology is currently being affected by proposed amendments related to market management and operation policies (Decree 24) for gold bars.

Recently, experts and members of the National Monetary and Financial Policy Advisory Council have proposed removing the monopoly on SJC gold bars.

According to Deputy Governor of the State Bank Pham Thanh Ha, the gold bar market has been fundamentally reorganized, with order and discipline; the gold bar trading network has been gradually narrowed; and capital mobilization and lending activities in gold have ceased.

At many times, gold prices fluctuated complicatedly, but market activities remained relatively stable compared to the previous period, without putting pressure on the foreign exchange market as before. People's habits and perceptions of gold bars have changed, and a part of the people's gold resources have been transformed for economic development.

Therefore, the goal of "anti-gold" has been successful. This context has led experts to propose removing the State monopoly on SJC gold bars and granting licenses to produce gold bars to a number of qualified enterprises.

Mr. Thinh analyzed that if this proposal is passed, the price of gold bars will decrease to a level more in line with market trends. This information will cause many people to switch to hoarding gold rings, which are much cheaper and more stable than gold bars. In fact, in the market, many people have sold gold bars to buy gold rings.

Another reason, according to Mr. Huynh Trung Khanh, Vice President of the Vietnam Gold Trading Association, is that the business of plain gold rings brings in lower profit margins than other jewelry items that require processing fees. Therefore, plain rings are not a priority item to promote when raw materials are limited. This causes the supply of gold rings to be lower, while the demand is suddenly high, so the price increases sharply, which is understandable.

Last weekend (April 6), the price of gold rings caused a surprise when it skyrocketed to 74.15 million VND/tael (selling price).

But it did not stop there, early this morning (April 8), the price of gold rings continued to increase, despite the cooling of world gold prices. Accordingly, the price of gold rings set a new peak at 74.45 million VND/tael, which is an increase of 300,000 VND/tael compared to the record at the end of last week.

Notably, the price of gold rings continued to soar. Just a few hours later, by noon on April 8, the price had increased by 1 million VND/tael, far exceeding the 75 million VND mark. Specifically, at 11:30, the price of gold rings was listed by Doji at 74 - 75.45 million VND/tael, an increase of 1.3 million VND/tael compared to early this morning.

At the same time, the price of gold rings listed by SJC was 72.8 - 74.2 million VND/tael, an increase of 550,000 - 650,000 VND/tael.