Domestic gold prices soared to an eight-year high on February 24, reaching 49.4 million VND (2,128.66 USD) per tael (1,766.4 USD per ounce).

A gold shop in Hanoi (Photo: VNA) 

That level was last surpassed in September 2011, when prices reached 49.3 million VND per tael.

Bao Tin Minh Chau gold firm listed an increase of about 4 million VND from February 21 afternoon.

Doji reported prices of 49.2 million VND, while Sai Gon Jewellery Company (SJC) posted 49 million VND per tael.

Smaller shops were asking for 50 million VND.

On the global gold exchange Kitco, after passing a seven-year high, prices rose 2 percent to 1,682.7 USD per ounce (2,027 USD per tael) the same day.

Michael McCarthy, chief market strategist at CMC Market, told Reuters: “The thinking is that fewer people are holding shares, selling down in particular, and that money has to fall into havens.”

On the local market, a tael of gold on February was 100 USD more than global prices, and websites of most gold firms were overloaded.

Bao Tin Minh Chau recorded a surge in transactions with 55 percent buyers and 45 percent sellers. The firm said on its website it was a good time for investors to trade gold to make a profit.

Disagreeing, Phan Dung Khanh, investment director of Maybank Kim Eng Securities, said it was not a good time to sell gold or speculate in the precious metal.

Khanh said prices also rose two years ago when cash was diverted from the declining Bitcoin to gold. He said COVID-19 and China-US tensions had added to the sharp increase, and said global prices could reach 2,000 USD per ounce (2,410 USD per tael) this year.

“Investors must be extremely cautious if they buy gold now,” Khanh said.

“Normally the gap between selling and buying is 500,000-700,000 VND, but today it reached more than 1 million VND. Prices could fluctuate a lot,” he added. 

On the State Bank of Vietnam (SBV)'s website, there were no announcements regarding the management of gold prices. 

“SBV does not need to make an announcement because Decree 24 on gold price management issued in 2012 had done a great job stabilising the local forex market and gold prices,” Khanh said.

“Gold demand in Vietnam was now lower than in global markets,” he said, adding that people had stopped hoarding gold.

“However, at these prices, investors are unsure which way to turn.’