On January 31, international gold prices surged past the $2,800 per ounce mark, reaching a new high of $2,893 per ounce on February 5. This increase was primarily driven by investor concerns over U.S. President Donald Trump's newly imposed tariffs, leading to heightened demand for gold as a safe-haven asset.
President Trump recently signed an executive order imposing a 25% tariff on imports from Canada and Mexico, along with a 10% tariff on Chinese goods. This move fueled fears of a prolonged trade war, potentially slowing global economic growth and increasing inflation, both of which have historically contributed to rising gold prices.
While the U.S. later decided to temporarily suspend tariffs on Canada and Mexico for one month, the 10% tax on Chinese imports remained in effect as of February 4. In response, China swiftly announced retaliatory measures, set to take effect on February 10. With such ongoing trade tensions, gold remains an attractive investment option for risk-averse investors seeking financial stability.
Following the Lunar New Year holiday, Vietnam's domestic gold market experienced sharp price movements. On the first trading session after the holiday, the price of gold bars increased by VND 500,000, reaching VND 87.3 - 89.3 million per tael. Meanwhile, gold rings saw a more significant increase of VND 700,000 - 800,000, pushing prices to VND 87.5 - 88.9 million per tael.
The upward trend persisted until the morning of February 6, when SJC gold bars surged past the VND 91 million per tael mark, with prices reaching VND 88.2 - 91.2 million per tael—a notable VND 2.4 million increase from pre-holiday levels. Gold rings also climbed, with buy prices fluctuating around VND 88 - 88.2 million per tael and selling prices ranging from VND 90.6 - 91 million per tael.
However, by the afternoon of February 6, the domestic gold market saw an abrupt downturn. SJC gold bar prices dropped sharply to VND 86.4 - 89.6 million per tael, marking a rapid decline of VND 1.8 million for buying and VND 1.6 million for selling within a few hours. Gold rings followed suit, shedding more than VND 1 million across both buying and selling prices, settling at approximately VND 86.4 - 89.4 million per tael.
The sudden drop in domestic gold prices coincided with discussions surrounding Prime Minister Pham Minh Chinh's Directive No. 03, which urged swift implementation of key post-Tet economic measures. The directive mandates that the State Bank of Vietnam (SBV) work closely with relevant agencies and local authorities to stabilize the gold market. Additionally, it calls for a review and potential amendments to Decree No. 24/2012/ND-CP on gold trading management, with recommendations to be submitted to the government in the second quarter of 2025.
While the directive initially helped cool gold prices, market experts warn that volatility remains a major concern. In 2024, SBV interventions brought gold prices down from their mid-year peak of VND 92 million per tael to around VND 87 million by year-end. However, with global gold prices rallying in early 2025, domestic prices rebounded to VND 91 million per tael by February.
Several international financial institutions have forecast that global gold prices could reach $3,000 per ounce this year. This projection is reinforced by ongoing U.S. tariff policies, which may prompt central banks worldwide to increase gold reserves as a hedge against economic uncertainty and inflation.
Despite a strong U.S. dollar and high interest rates, gold prices have continued to climb, remaining in close proximity to the $3,000 per ounce milestone. Experts note that geopolitical instability and shifts in U.S. trade policy will be key determinants of future gold price movements. If trade tensions persist, financial markets could face increased turbulence, driving gold prices higher. Conversely, should President Trump implement inflationary economic policies, the Federal Reserve (Fed) may opt to raise interest rates to counteract inflation. This could strengthen the U.S. dollar and potentially drive gold prices downward.
Additionally, central banks have increasingly turned to gold as part of their foreign exchange reserves, with many diversifying away from the U.S. dollar due to concerns over its long-term stability. This trend, coupled with ongoing geopolitical uncertainties, could provide further support for sustained gold price increases throughout 2025.
With domestic interest rates at relatively low levels and other investment channels yet to show strong growth, gold remains a favored asset class for Vietnamese investors in 2025. Despite supply constraints, demand remains robust, with investors finding alternative methods to purchase gold, including online transactions.
Historically, gold has been viewed as a stable store of value, particularly in times of economic uncertainty. The recent surge in gold prices has further reinforced this sentiment, with investors flocking to gold amid concerns over inflation, currency devaluation, and economic slowdowns. Given the uncertainty surrounding global trade policies and interest rate fluctuations, gold is expected to remain a primary investment choice for both institutional and individual investors alike.
However, just as in global markets, Vietnam's gold prices are expected to remain volatile throughout the year. Beyond the influence of unpredictable global gold price movements, domestic gold markets will also be affected by government policies aimed at stabilizing the sector. As the Vietnamese government intensifies its oversight and implements potential regulatory changes, gold market dynamics may shift unpredictably, adding another layer of complexity for investors navigating this ever-changing landscape.
While short-term fluctuations are inevitable, many analysts believe that long-term prospects for gold remain strong, particularly if global economic conditions continue to deteriorate. Investors are therefore advised to closely monitor market trends and government policies to make informed decisions regarding their gold investments in 2025 and beyond.
