Why do people still buy gold in the digital age?

More than just a precious metal, gold embodies beliefs in stability, resilience, and safety. It’s no surprise, then, that during special occasions such as New Year celebrations or major life events, people still flock to buy it. There’s a spiritual significance in the act, but also a deeper cultural thread that runs through generations. It remains a vital part of Vietnamese spiritual life. On the most recent Day of the God of Wealth, for instance, gold prices reached VND90 million per tael, yet long queues still formed. Buyers were driven by hopes for a prosperous year ahead.

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In recent years, global economic and political landscapes have been marked by continual upheaval, triggering ripple effects that are both wide-ranging and difficult to predict. When the Russia–Ukraine conflict erupted in February 2022, global gold prices surged, at times surpassing US$1,900 per ounce. By November 2024, in the face of ongoing tensions, prices climbed by another 0.6 per cent. Russia, known for its vast gold reserves, faced a raft of Western sanctions further fuelling the rise in prices, as uncertainty over the duration of the conflict loomed large.

War and political instability have taken a toll on the global economy. Under mounting pressure, the US Federal Reserve (FED) has had to adjust interest rates to rein in inflation, which led to a stronger US dollar and a slight easing of gold prices in the domestic market. In contrast, gold prices in many Asian countries, particularly Vietnam, have continued to climb. In November 2024, the domestic SJC gold price approached VND84 million per tael. It has since risen to VND120 million per tael. This surge reflects a widespread sense of unease, as the economy remains volatile and the war offers no clear end in sight.

Donald Trump’s return to office brought further uncertainty. Shortly after his re-election, he introduced tax policies with rates reaching up to 46 per cent on goods imported from Vietnam, placing the country among those hit hardest. This move worsened the domestic economic picture and marked a shift in the trade war, which is no longer confined to the US–China dynamic. Even countries like Vietnam, long adept at maintaining neutrality, have now been drawn into its widening scope.

Against the backdrop of an economy that has steadily weakened over the past three years, these tariffs have delivered a severe blow. Rising production costs, escalating prices, and stagnant incomes have eroded purchasing power. The local currency has depreciated sharply, while hopes for recovery continue to dwindle. Amid this instability, gold, regarded as a “safe haven”, has remained in flux, prompting concern among many who watch their assets sway with every major geopolitical or economic shift.

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Faced with persistent instability on the world stage, investors and households alike are taking a more measured approach, favouring assets that offer liquidity and long-term value retention. This climate has given rise to what psychologists refer to as the acute stress response, or the fight-or-flight instinct, now reflected in emerging investment trends. Faced with risk, many are turning to traditional assets such as gold, rather than riskier, fast-moving markets. In just the first five months of 2025, gold prices surged by 35.37 per cent, underscoring the enduring appeal of this precious metal.

The shift is especially pronounced among Millennials and Gen Z. Shaped by repeated economic shocks, these generations are acutely aware of the need to safeguard wealth in uncertain times. Their approach is not solely focused on short-term profit but grounded in long-term sustainability and legacy planning. There is also a growing interest in portfolio diversification, with gold viewed as a reliable buffer, an asset that can withstand inflation and shield against economic downturns.

Experts point to five principal investment channels considered safe, practical, and accessible during turbulent periods, yet gold continues to take precedence. Unlike real estate, which requires time to transact, or stocks that are prone to sharp declines, gold remains highly liquid and easily converted into cash. This aligns perfectly with the defensive mindset now dominating investor behaviour.

Gold’s intrinsic value is independent of any nation’s monetary policy and resists the immediate tremors of financial markets or currency fluctuations. Its strength lies in its long-term economic promise. For those seeking peace of mind and a more diversified asset base, gold remains a steadfast option. It speaks to foresight, prudence, and a commitment to financial stability.

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