HA NOI — Saving is the best investment amid the current fluctuating gold prices, says HCM City Banking University business administration department head Le Tham Duong.
Duong told Kinh te and Do thi newspaper (Economy and Urban Areas) domestic gold prices remained significantly higher than world gold prices, although the difference narrowed to VND2.2-2.4 million (US$105.77-115.38) per tael yesterday from several previous days of gaps up to VND3 million ($144.23) per tael.
Sai Gon Jewelry Co chairman Le Hung Dung said the difference was because a connection hadn't been established between domestic and global prices, with many local firms refering to price levels of other buyers and sellers before posting their own prices.
Meanwhile, the monetary market has seen new peaks in interest rates for gold deposits over the last few weeks.
At the NamABank, gold deposit rates reached a peak of 4 per cent. At the Saigon Commercial Bank interest rates for short-term deposits registered in gold reached 3.5 per cent and gold deposit rates even reportedly reached 4.5 per cent at some SCB branches.
Duong said banks raising gold deposit rates could be doing so for several reasons.
"Some banks, due to their liquidity situation, find it hard to deposit money in dong and shift to depositing gold. Some others were perhaps waiting for an uptrend in gold prices based on [current] forecasts and analyses," he said.
Some banks were buying gold in order to be active in managing their liquidity in case of interest fluctuation, he said, noting that doing this would be highly risky in circumstances of gold price fluctuations.
Duong said that in order to narrow the gap between the world and domestic gold prices, there was no other way but to wait for the Government to issue a decree on gold management.
"With a regulation stipulating State monopoly in producing gold bars, it'd be simple for the State Bank to interfere in price differences," he said.
Related to last week's situation in which gold trading was busy while gold prices fell strongly, Duong said the developments were mainly due to the market rather than management policies.
"While world investors are interested in market analyses and different information sources, people in Viet Nam follow their psychology, they flock into shops to buy gold when prices edge up slightly and stop buying when prices decline," he said.
"Many people are still awaiting forecasts for gold price increases over the next few months," he said. — VNS