Gold prices have risen to new highs in Vietnam as they track recent rises in global prices triggered by the coronavirus pandemic. SJC gold on Tuesday rose to VND50.3 million ($2,170) per tael to surge past the previous record of VND49.5 million ($2,137) in 2011, when global prices soared to historic highs.
Gold prices held steady near an eight-year high on Tuesday as investors weighed a spike in Covid-19 cases around the world against a survey showing a rebound in U.S. services industry activity and expectations of a revival in China’s economy.
Spot gold was almost unchanged at $1,784.06 per ounce by 0453 GMT, just $4.90 shy of a near eight-year high hit last week.
Phan Dung Khanh, head of the investment advisory at Maybank Kim Eng Vietnam, said falling deposit interest rates are increasing demand for gold.
The four state-owned lenders, Vietcombank, BIDV, Vietinbank, and Agribank, recently lowered their rates on 12-month deposits from 6.5 to 6 percent. Private banks have cut them by 0.4-0.8 percentage points.
Experts also pointed to the falling stock market, which has lost nearly 11 percent this year, for turning gold into a safe haven.
Tran Thanh Hai, chairman of the Vietnam Gold Investment and Trading Corporation, forecast gold prices to remain volatile for the next three months and start falling at the end of October before the U.S. presidential elections.
Other analysts expected prices to rise further due to the uncertainties caused by the pandemic and geopolitical tensions.
Goldman Sachs last month forecast that gold price could reach $1,800 in three months and $2,000 in a year.
“Gold investment demand tends to grow into the early stage of the economic recovery, driven by continued debasement concerns and lower real rates,” it said in a note.
Vietnam’s gold bar and coin demand in the first quarter fell 8 percent year-on-year to 12.3 tonnes, according to the World Gold Council.