For five straight days, Hoai, a 38-year-old self-employed individual, has been among the throng of hopeful buyers outside a Hanoi gold shop on Tran Nhan Tong Street. The majority of these people, much like Hoai, end up leaving without any gold in their hands.
Hoai, who has some liquid savings, is attempting to safeguard her wealth through gold investment. The low returns offered by bank deposit rates have led her to this choice. Customers are permitted to buy only a single mace of gold at a time, which equals one-tenth of a tael or 3.75 grams. Despite the small quantity, Hoai is determined to endure the extensive waiting hours or even days to secure gold as an asset.
In a similar situation is Thu Ha, a 26-year-old office worker in Hanoi. She withdrew half of her savings, totalling VND300 million (US$11,388), to invest in gold. Last month, she succeeded in buying five maces when the price was around VND130 million per tael. Now, she starts queuing as early as 4 a.m. every day in the hopes of purchasing more. However, the shortage of supply has left her with nothing. Some stores have even started issuing appointment slips, promising delivery within 7-10 days.
Lan, a 43-year-old woman, took a day off from work to queue for her elderly mother. Her mother had been trying to buy gold with her pension without success. Lan decided to step in and help.
Gold shops across Hanoi and Ho Chi Minh City are currently witnessing unprecedented demand as prices soar to record highs. A tael of gold bar is now trading around VND153 million while gold rings range between VND153–160 million, representing an 80% increase since the start of the year.
The rush has led to some interesting dynamics. Some people are making money by standing in queues on behalf of others. Most shops run out of stock by noon, with both bars and rings disappearing from the shelves. Customers are advised to return the next morning, but there are no guarantees of availability.
In Ho Chi Minh City, the Saigon Jewelry Company outlet on Nguyen Thi Minh Khai Street had to stop taking orders for gold rings by midday Friday, limiting sales to just 3 maces per person.
According to Huynh Trung Khanh, Vice President of the Vietnam Gold Trading Association, the gold-buying frenzy is not exclusive to Vietnam. People in other countries, including South Korea, are also rushing to buy gold as global prices have crossed US$4,300 per ounce.
The State Bank of Vietnam, however, has warned buyers about the volatility of gold as an investment and advocated for prudence. The bank attributes the sharp domestic price increase to escalating global rates, public anticipation of further hikes, and limited local supply.
What is causing the gold-buying frenzy in Vietnam?
The rush to buy gold is being driven by low bank deposit rates, soaring gold prices, and the desire to secure wealth.
Are other countries experiencing a similar gold-buying frenzy?
Yes, this is not unique to Vietnam. Countries like South Korea are also witnessing a rush to buy gold due to the increase in global prices.
What has been the response of the State Bank of Vietnam to this situation?
The State Bank of Vietnam has urged buyers to act prudently, given the volatility of gold as an investment. It attributes the rise in domestic prices to surging global rates, public anticipation of further increases, and limited local supply.
