Should one sell gold for a home purchase amid sharp price drops?

According to an expert, gold is a defensive asset but not an absolute one, suggesting selling a portion to avoid impacting next year's home buying plan.

In the current climate, investors should prioritize protecting their financial plans rather than trying to maximize additional profits from gold. A suitable strategy involves taking partial profits and gradually shifting assets to deposits or more stable channels to secure funds for a planned apartment purchase. Simultaneously, investors can retain a portion of gold as a defensive asset for their overall portfolio.

This advice comes as Hong Gam, a reader, bought 5 taels of SJC gold bars late last year, primarily to safeguard her savings. She intended to use a portion of this as capital for an apartment purchase next year. With recent gold price drops, she is unsure whether this is just a short-term correction or the start of a deeper downward trend. If she sells now, she would still make a profit, but it would be significantly lower than when prices peaked. If she holds onto it, she worries prices will continue to fall, affecting her home buying plan. She is seeking expert advice on whether to take partial profits, sell everything and move funds to savings, or continue holding gold for a while longer.

From a personal financial planning perspective, many investors still view gold as an "absolute defensive asset," when the nature of the precious metal is actually more complex. Gold prices are highly volatile and difficult to predict. Historically, each upward or downward cycle of this precious metal can fluctuate by tens of percent, so considering gold an "absolute safe haven" can lead many investors to misjudge the actual risk level.

The global economic recovery remains neither clear nor uniform, even as many countries tend to ease monetary policy or signal growth support. This period is characterized by a defensive mindset and significant uncertainty in financial markets. This could lead to considerable gold price volatility in the near future, rather than forming a stable upward or downward trend as many anticipate.

On 3/6, each tael of SJC gold bars was listed around 154 - 157 million VND, a decrease of about 38 million VND compared to the peak of over 192 million VND established at the end of January.

However, gold still plays a role in an asset portfolio, especially as a hedge against systemic and geopolitical risks. Gold's strengths include its global liquidity and quick convertibility during major shocks like financial crises, geopolitical tensions, or risks of currency distrust.