Gold prices have been on a meteoric rise, with global gold prices hitting a record $2,838 per ounce on February 4.

In Vietnam, the price of SJC gold bars surged to 90.1 million VND ($3,570) per tael, while gold jewelry briefly exceeded this threshold. Investors and market watchers are now grappling with the question of how much higher gold can climb in this unpredictable climate.

Why is gold skyrocketing?

Economic policies and global market dynamics are playing a major role in this price surge. Dr. Nguyen Huu Huan from the University of Economics Ho Chi Minh City believes that investor psychology is the key driver of this rally, rather than just policy changes.

He noted that in the past, when Donald Trump was elected U.S. President, gold prices actually dropped by more than $100 per ounce due to optimism about pro-business policies and a stronger U.S. dollar. However, when Trump threatened tariffs on Mexico, Canada, and China, gold prices soared, as investors feared inflationary pressures from higher import costs.

"This time, we are seeing similar patterns. Investors initially expected that protectionist policies would strengthen the U.S. dollar, but now there are concerns that tariffs could fuel inflation, making gold an attractive safe-haven asset," Huan explained.

Adding to the uncertainty, Trump recently backtracked on immediate tariffs against Mexico and Canada, further fueling volatility in the gold market. As a result, gold prices have fluctuated sharply, with sudden drops at market openings followed by quick recoveries of tens of dollars per ounce.

According to Huan, the gold market remains in a highly volatile state. On one hand, investors looking to lock in profits are selling, while on the other hand, those fearing further inflation are buying aggressively. This tug-of-war has kept gold prices near historic highs, with no clear indication of whether they will continue to rise or stabilize.

Vietnam’s domestic market is also affected by seasonal demand, particularly during the Lunar New Year and the God of Wealth Day (10th day of the first lunar month). Even if international prices cool off, domestic gold prices are expected to remain elevated due to limited supply and stringent government controls on gold imports.

Will jewelry gold prices surpass SJC gold bars?

Gold jewelry prices in Vietnam could rise faster than traditional SJC gold bars, according to Huan. Unlike SJC gold, which is tightly regulated by the State Bank of Vietnam, gold jewelry prices fluctuate freely based on supply and demand.

“There is a possibility that jewelry gold prices may temporarily exceed listed SJC gold bar prices due to short-term demand spikes. However, in actual transactions, SJC gold bars still tend to command a premium,” he added.

Meanwhile, Dr. Nguyen Tri Hieu, a renowned economist, agrees that 2025 will be a year of major gold price fluctuations, particularly in the global market. The biggest concern remains Trump’s proposed tariff policies on Mexico, Canada, and China, which have made investors turn to gold as a safe-haven asset amid financial market instability.

“The domestic gold market follows global trends and is now experiencing a resurgence. With international gold prices rising and supply constraints in Vietnam, gold prices will likely continue their upward trajectory. While the State Bank of Vietnam is working to stabilize SJC gold prices, gold jewelry may see more dramatic increases,” Hieu predicted.

Should investors buy gold now?

With gold prices surging, many investors are wondering whether this is the right time to buy or sell. Huan advises caution, especially for those looking to purchase gold as an investment.

“If you’re buying gold for symbolic or cultural reasons, such as for the Lunar New Year or the God of Wealth Day, then purchasing small amounts (1-2 taels) is fine. However, for long-term investors, it may be wise to hold onto existing gold assets rather than buying at peak prices,” he said.

For those who bought gold before Tet (Lunar New Year), the rally has already delivered strong profits. But for those looking to enter the market now, buying during peak volatility carries significant risks. Dr. Hieu echoed this sentiment, warning investors against chasing rising prices.

“Gold investment requires discipline and patience. If you’re buying purely based on sentiment, you might miss better opportunities or end up facing losses if prices suddenly correct. Investors should have a clear financial strategy rather than making impulsive decisions,” he advised.

Hieu also stressed the importance of setting clear profit-taking points. “If you’re holding gold, you need a strategy for when to sell. If you hesitate too long, prices may drop rapidly, erasing gains. Similarly, for buyers, knowing when to enter the market is crucial,” he added.

With global economic uncertainty, shifting U.S. policies, and domestic market fluctuations, analysts predict that gold prices will continue to experience major swings in 2025. Investors are urged to stay informed, avoid emotional trading, and make strategic decisions based on long-term trends rather than short-term speculation.

Nguyen Le