While the global economy remains on track for a soft landing this year, the commodity market around the world, including Vietnam, would be an attractive investment option for investors in the short to medium term.
This was the view of experts at an international conference jointly held on May 16 by the Mercantile Exchange of Vietnam (MXV), the country's centralized commodity trading market organizer, and the Chicago Mercantile Exchange (CME Group) to discuss the global economic outlook and its impact on the commodities market.
| Deputy General Director of MXV Nguyen Duc Dung. Photos: Khac Kien/The Hanoi Times |
Deputy General Director of MXV Nguyen Duc Dung said that investment capital is expected to shift from traditional investment channels to the commodity market, where there are better profit margins due to significant price fluctuations in key items.
While markets such as agricultural products, industrial raw materials, and energy require in and depth research on product characteristics, supply-demand structures, and information relating to weather and seasons, metals are considered relatively easier for investors to trade.
CME Group’s Senior Economist and Executive Director Erik Norland mentioned that in the latter half of 2024, the economic outlook will become clearer following macroeconomic data from the first two quarters. This will create major trends in the commodities trading market, especially in the energy and precious metals sectors.
| The Mercantile Exchange of Vietnam. Source: VGP |
In Vietnam, the commodity trading market has been very active in the first four months of the year. The trading volume on MXV in April 2024 increased by 18.4% compared to March 2024 and by 65% compared to April 2023. The cumulative trading volume for the first four months of 2024 on MXV grew by 21.5% compared to the same period last year. Platinum was the second most traded commodity on MXV in April, accounting for 3.8% of total trading volume.
| CME Group’s Senior Economist and Executive Director Erik Norland. |
The average trading value reached VND7 trillion ($275 million) per day. On April 19, a record trading value of nearly VND11 trillion ($432 million) was recorded in Vietnam.
Norland forecast that the trading volume of commodities worldwide, and in Vietnam in particular, would continue to grow significantly in the second half of the year.
Currently, MXV is interconnected with CME Group for trading metals such as silver, platinum, and copper. The trading volumes for these commodities have been steadily increasing and have consistently been among the most traded items in Vietnam in recent quarters.
According to Sachin Patel, CME’s Director of Metals Products for the Asia-Pacific region, macroeconomic information is often updated quickly and publicly available through the media. The economic outlook is usually predicted months in advance and does not change abruptly, making metals trading safer and more stable than other markets.
Moreover, precious metals like gold and silver act as safe havens during economic downturns. Previously, investors needed $8,250 to trade a standard silver contract, but now, mini- and micro-silver contracts require margins of only $4,125 and $1,650 per contract, respectively. These will be the focus of trading and safe-haven investments soon, she noted.
Speaking at the seminar, economist Ngo Tri Long noted that globally, precious metals such as gold, silver, and platinum are traded on commodity exchanges just like other commodities.
“With the current high gold prices, the demand for trading precious metals will continue to increase,” he suggested.
