Investors are pouring money into silver market
On the last days of 2024, Duc Tam, an investor in Hanoi, bought tens of silver taels, not gold or dollar, as he had done in the past. Like many other Vietnamese, Tam was excited about the new investment channel after hearing about the investment of thousands of tons of silver by Warren Buffet which brought the billionaire profit of thousands of percent after several years.
In 2024, investors saw a growing tendency to invest in bullion silver and jewelry silver. Like gold, silver prices have increased sharply in the world market and the silver trade has become more bustling than in previous years.
Tam said he could not find a good profitable investment channel for his idle money. The bank deposits had low interest rates despite high inflation. The investment in stocks was not promising as stock prices did not increase. The real estate market was also quiet with weak liquidity. Meanwhile, gold prices rose too sharply and he did not think investing in gold was a good choice.
“Doing business at this moment doesn’t bring high profit because of low demand. Meanwhile, there is no attractive investment channel,” Tam said, explaining why he is now interested in bullion silver.
Many groups of silver investors have emerged on social networks, and the number of members has increased rapidly. There are some groups with 80,000 members each. Some goldsmith companies have marketed both bullion (1, 5, 10 tael) and jewelry silver. They also sell silver in bulk, tens of kilograms, for investors’ hoarding.
Realizing the increased demand from investors, goldsmith companies have launched noisy media campaigns to boost silver sales.
There is a wide range of silver-made products available, including silver bullion, rings and bracelets, silver pictures, pens and coins. Offers for silver products also come from famous corporations from Switzerland, Japan and Mexico.
The products are made of pure silver, sealed in an assay card. Buyers can place orders and get delivery before Lunar New Year holiday.
On forums, many investors commented that the silver prices have been on the decrease over the last two months, and though there is still no sign of bouncing back, the silver price is expected to rise in 2025, thus bringing profits to those who buy and hoard silver products now.
In 2024, the silver prices in the world market rose rapidly, from below $22/ounce, to $35 in late October, which meant a 58 percent increase. On December 20, 2024, silver was traded at $29/ounce (+ 32 percent), which was higher than the 26 percent increase of gold in the whole year of 2024 and the increase of 13 percent of the VN-Index.
Silver is bought at VND1.09 million per tael, while the selling price is VND1.12 million per tael. Meanwhile, 999 bullion silver is bought at VND29 million per kilogram and the selling price is VND29.9 million.
As silver prices are lower than gold (VND1 million for 0.1 tael), buyers just have to pay VND30 million for one kilogram of silver. So they buy silver every month to hoard as an asset.
Risks
Like gold, silver is considered a valuable metal, used in many industries, and therefore, is a well-known investment item. However, in Vietnam, investment in gold has just become more popular recently, when gold prices became overly high and gold price increases rose sharply.
However, analysts have warned of risks.
Firstly, the precious metal once saw prices fluctuating greatly in the past. In 1980, silver prices once soared to over $35/ounce from $4 three years before. But two years later, silver prices dropped to $5.5/ounce.
In 1992, silver prices dropped further to $3.3/ounce and could not exceed the $10/ounce threshold until early 2006. The silver price reached its peak of $50/ounce in 2011, but then plunged again to $14 in 2015 before it soared to $30.
Secondly, investors may face risks in liquidity. Globally, gold and silver are traded via trading floors, while in Vietnam there is no such trading floor.
Thirdly, there is no standard used to measure the quality of silver.
Source: https://vietnamnet.vn/