Gold prices have reached an all-time high of $4,000 per tael, sparking concerns among investors. Experts warn that gold is currently in an overbought state, advising caution before making any investment decisions.

Why are gold prices soaring?

Speaking with VietNamNet, Nguyen Quang Huy, executive director of the Finance-Banking Department at Nguyen Trai University, noted that both domestic and global gold prices continue their strong upward trend, approaching historic peaks.

The key drivers behind this surge include economic uncertainties, geopolitical risks, and increased gold purchases by major financial institutions.

“Central banks worldwide are aggressively buying gold to boost their foreign reserves and hedge against economic instability,” Huy explained. “This strategy reflects a shift towards safeguarding assets against inflation, currency devaluation, and financial turbulence.”

Additionally, the U.S.-China trade war is heating up again, causing disruptions to global supply chains. Tensions in the Middle East and escalating conflicts, including between the U.S. and Haiti, are also fueling demand for gold as a safe-haven asset.

As uncertainty rises, investors are flocking to gold, particularly gold bars and SJC gold in Vietnam.

Is there a cause for concern?

Associate Professor Dr. Nguyen Huu Huan from the University of Economics Ho Chi Minh City pointed out that U.S. economic policies are a major factor behind the gold price rally. Policies under former President Donald Trump contributed to inflationary fears and recession risks, further pushing gold prices higher.

He emphasized that gold prices in Vietnam are naturally following global trends, rather than being manipulated or artificially inflated. However, domestic prices often rise more sharply than international prices, leading to a significant price gap of millions of dong per tael.

“In this context, the State Bank of Vietnam may consider adjusting Decree 24/2012/ND-CP to increase the supply of gold in the market,” Huy suggested. “However, any regulatory changes must prioritize monetary security and prevent excessive gold hoarding.”

Will gold prices cool down? Key investor takeaways

According to Huy, gold is currently trading at record highs of over $3,000 per ounce globally. While major financial institutions remain bullish, technical indicators such as the Relative Strength Index (RSI) exceeding 70 suggest the market is overbought, raising the likelihood of price corrections.

Short-term gold prices will continue to fluctuate based on macroeconomic conditions and central bank policies. In Vietnam, if global prices rise further, domestic gold will stay elevated, though exchange rate shifts and regulatory decisions could influence price movements.

Huan predicts gold could break new records amid ongoing geopolitical tensions but warns of potential corrections.

“Gold prices won’t rise in a straight line,” Huan explained. “Corrections will occur, especially at these high levels. Investors looking to buy gold should wait for significant pullbacks rather than chasing prices at their peak.”

Huy also urged investors to avoid panic buying due to FOMO (fear of missing out), emphasizing the importance of risk management.

“The State Bank of Vietnam may intervene by adjusting supply-demand mechanisms to stabilize the market,” he noted.

“Investors should stay informed and avoid following herd mentality without a clear strategy.”

Additionally, financial experts recommend diversifying investments rather than putting all capital into gold. Alternative investment options include stocks, bonds, real estate, and savings, as well as entrepreneurial ventures to capitalize on Vietnam’s growing FDI inflows.

Nguyen Le