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Gold siphons off investors
While gold prices have skyrocketed in recent days on both global and domestic markets, reaching an all-time high of US$1,768.5 per ounce on Monday, share prices on the nation's two stock exchanges have continued to plunge, with no signs of a recovery.
Domestic gold prices have tracked global prices tightly, hitting a high of VND46.2 million ($2,221) per tael on Tuesday morning – up from VND41.9 million ($2,029) per tael a week ago. (A tael is equivalent to 1.2 ounces.)
However, the domestic price exceeded the global price by over VND1 million ($48) per tael, while the gap between the buy and sell price on the local market reached over VND700,000 ($33.65) per tael.
Stockbrokers complained that many investors began to sell securities and buy gold when the world price of the precious metal rose beyond $1,500/ounce. Many securities brokers became gold brokers as well.
Some investors said that, in addition to gold, they also invested in US dollar as they expect the value of the dollar to rise as gold trading companies gathered in dollars to import gold.
However, many market insiders are grumbling that domestic gold prices show signs of being manipulated and suggested that the gold market would expose investors to high risk in the short term.
It would be easy for investors to become victims if they jumped into gold now, said the general director of Ha Noi-based StoxPlus Financial Media Co, Nguyen Quang Thuan.
"Gold investing, particularly online, requires high expertise," Thuan told the newspaper Dau tu Chung khoan (Securities Investment).
Chu Duc Tuan, deputy head of analysis for Wall Street Securities Company, said that gold had risen beyond its real value on the domestic market, possibly due to manipulation, and advised investors not to follow a herd mentality, particularly with gold alread heavily inflated.
According to Wall Street Securities Company, about 40 per cent of investors currently rush to gold as a safe haven, 25 per cent pour money into the real estate market, 20 per cent invest in US dollars and just 15 per cent remain vested in the stock market.
"The VN-Index fell through the psychological floor of 400 points, desmonstrating weary investor psychology," said Le Tham Duong, head of the HCM City Banking University's Business Administration Department. "Most remaining investors are professionals with sufficient financial capacity to hold onto long-term investments."
Securities could become a means of restoring asset value since share prices were at an all-time low and securities could continue to promise investors long-term profitability, said Saigon Securities Inc chairman Nguyen Duy Hung.
vietnamnews
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