Gold Rush in Vietnam as Prices Dip, Stocks Vanish
A significant surge in demand for gold has gripped Vietnam, with citizens flocking to jewelers nationwide in an attempt to capitalize on a recent price correction. However, the rush has exposed a critical scarcity, leaving many aspiring buyers facing empty shelves and strict purchase limits. The precious metal, typically a popular savings and investment vehicle in the country, has seen prices retreat to a three-week low, igniting a buying frenzy that has outstripped available inventory.
On Tuesday, queues snaked outside prominent jewelry stores in Hanoi, such as the Phu Quy store on Cau Giay Street. The allure was the dropping price of gold, with Saigon Jewelry Company bullion prices experiencing a notable decline of 2.4%, reaching VND154.2 million (US$5,872) per tael. This marked the lowest rate observed since December 9th, presenting an opportune moment for investors and everyday consumers alike to acquire the coveted commodity.
Despite the influx of eager buyers, the reality on the ground painted a picture of scarcity. Retailers, anticipating a more moderate demand, found themselves unprepared for the sudden surge. At the Phu Quy store, the response to the overwhelming demand was to implement purchase restrictions. Each customer was permitted to buy a maximum of just 18.75 grams of gold rings. The situation was even more dire for gold bars, which have been in such critically short supply throughout the year that they have become a rare sight in most retail establishments.
Customers wait to buy gold in Phu Quy store in Hanoi. Photo by VnExpress/Trong Hieu
The scene was replicated at other major retailers. At the Bao Tin Minh Chau store, also located on Cau Giay Street, the store’s entire stock of gold rings was depleted by 10:30 AM. Dat, an office worker who typically invests in gold for both its security and potential for growth, recounted his experience. He had rushed to the store during his lunch break, alerted by the sharp fall in prices.
“I was surprised by the sheer number of people trying to buy,” Dat shared. “I visited three or four shops, but I still couldn’t manage to make a purchase.” He expressed an expectation that the current sharp correction would be temporary, predicting a subsequent rise in gold prices.
The gold buying spree was not confined to Hanoi. In Ho Chi Minh City, similar scenes of depleted stock unfolded. Both the Saigon Jewelry Company and Mi Hong stores reported running out of gold rings early in the morning. An employee at Mi Hong stated that by 10 AM, an impressive 500 queue tokens had already been issued, underscoring the immense public interest and the urgent desire to buy. Many individuals arrived at these stores with the intention of purchasing gold rings or bars, only to be turned away empty-handed due to the lack of available inventory.
Global Context and Price Dynamics
The surge in domestic demand in Vietnam coincides with a period of fluctuation in global gold markets. On Monday, spot gold experienced its most significant daily percentage loss since October 21st. Analysts attributed this sharp decline to profit-taking activities among investors. The precious metal had plunged by 4.5% to $4,330.79 before experiencing a partial recovery to $4,364.70 on Tuesday.
Customers leave Bao Tin Minh Chau store in Hanoi where an “out of stock” sign is displayed. Photo by VnExpress/Trong Hieu
It is worth noting the considerable difference between global and domestic prices. Currently, global gold rates are approximately 11% lower than those observed within Vietnam. This price differential likely contributes to the heightened interest from Vietnamese consumers, who see the current dip as an attractive entry point for their investments, further exacerbating the supply challenges faced by local jewelers. The combination of a global price correction and a strong domestic desire to buy has created a unique market dynamic, characterized by both opportunity and significant scarcity.
