Golden Burden: Soaring Prices Crush Borrowers, Enrich Savers in Vietnam
HANOI — From the porch of his three-story home on the outskirts of Vietnam's capital, Trinh Tat Thang surveys a neighborhood dotted with new construction, a sight that now fills him with anxiety rather than pride. His house, built with gold borrowed from relatives, has become a symbol of a financial trap sprung by the metal's meteoric rise.
In Vietnam, where gold is woven into the fabric of savings, inheritance, and major life events, the recent surge past $5,000 per ounce has reshaped the economic landscape overnight. For generations, families have preferred lending physical gold for projects like home-building over dealing with bank mortgages. But these informal loans come with a critical condition: repayment must be made in gold, not its cash equivalent.
Thang, 44, borrowed four "luong" bars—a local unit—from relatives in 2022 to break ground. Then worth about $10,000, that debt has ballooned to over $29,000 as prices nearly tripled. "I have a good house, but also a huge debt on my shoulders. It wasn't worth it," said Thang, who earns less than $700 a month in pharmaceutical marketing. "The system is broken. No one in their right mind would borrow gold now."
Analysts point to global uncertainty, inflation fears, and central bank buying as key drivers behind gold's rally. In Vietnam, however, the impact is intensely personal, cleaving society into winners and losers.
On one side are savers like 74-year-old Tran Thi Lan. The retired shopkeeper, who spent decades accumulating rings, bracelets, and bars, finds herself "suddenly rich," her traditional savings style vindicated. "My kids used to joke about my obsession," she said, laughing. "Now they call it wisdom." Government auditors estimate Vietnamese households hold roughly 400 tonnes of gold privately, a hoard whose value has skyrocketed.
On the other side are those locked into gold-denominated debts or priced out of cultural traditions. Wedding gifts, often gold jewelry, have become prohibitively expensive. Tran Tu Linh, 29, who gifted a gold ring at a friend's wedding seven years ago, said she would not expect the same in return today. "It would be a burden," she admitted. "Life would be easier without this obsession with the gold price."
The frenzy is visible on Hanoi's Tran Nhan Tong street, where jewelry shops regularly sell out. Office worker Huong takes monthly half-days off to queue for bars, seeing it as a critical investment. "My efforts have paid off," she said, though lamenting she didn't start sooner.
With no national gold exchange and limited bank trading options, the domestic market operates at a premium, fueled by both investment demand and deep-seated cultural trust in the metal's enduring value—a trust now tested by its volatility.
Voices from the Community:
"This isn't just economics; it's a social crisis. Families are being torn apart by debts that were meant to help. The government needs to regulate these informal loans before more people lose their homes." — Le Minh Khoi, 52, Financial Counselor (Emotional & Critical)
"My grandmother's gold bracelets paid for my university education. The current price is a validation of generational wisdom. It's a safety net that finally gets the respect it deserves." — Nguyen Anh Dao, 31, Teacher
"The volatility is worrying. We're seeing a bubble driven by fear, not fundamentals. While I benefit as a holder, the long-term distortion to our savings culture could be severe." — Pham Quang Huy, 40, Small Business Owner