Rua Gold Inc. (TSXV: RUA, OTC: NZAUF, WKN: H8E)
An Emerging Gold Explorer with Two Highly Prospective Land Packages in New Zealand’s historical gold fields.
The Asian gold rush is truly wave after wave. First, young investors in China are keen on accumulating “gold beans,” the shelves of convenience stores in South Korea are being emptied of gold, and then gold demand in India surged during major festive seasons. Now, this gold fever has spread to two Southeast Asian countries: Vietnam and Thailand.
At the end of June 2024, the CEO and director of the emerging gold exploration company Rua Gold Inc. (CSE: RUA, OTC: NZAUF), Robert Eckford, stated in an interview with Metals 100 that he believes Rua Gold is undervalued and demonstrates his confidence by purchasing shares of the company himself. Additionally, he analyzed why New Zealand is a mining-friendly jurisdiction and shared updates on the development of the company’s two projects.
Last month, to curb the soaring gold prices, the State Bank of Vietnam (SBV) announced that it would directly sell gold bars to four state-owned commercial banks at a price of 78.98 million VND per tael, and these banks would sell them to the public at a price not exceeding 79.98 million VND per tael, approximately 1.2% below the market price. Upon hearing this news, people flocked to buy gold, and the Vietnamese banks sold two tons of gold within a week. Left with no other option, the banks had to implement purchase limits, restricting individuals to buying no more than one tael.
The reasons why Vietnamese people are rushing to buy gold include sharply declining savings interest rates, the real estate market plummeting to freezing point, and continuous devaluation of the Vietnamese dong, making gold a primary investment channel. Since the end of the pandemic, the exchange rate of the Vietnamese dong against the US dollar has fallen by about 10%. Meanwhile, the country’s CPI in May rose to 4.4%, the highest since 2023.
Thailand is experiencing a similar situation. A Thai gold trader stated that he had never seen such strong demand for gold during a period of rising gold prices. At current prices, people should be selling gold, but the reality is quite the opposite; everyone is buying, and it can even be described as a gold rush. The reason, similar to the Vietnamese dong, is that the Thai baht has also depreciated by about 10% against the dollar.
Singapore-based commodities and financial market expert Michael Langford told the South China Morning Post that investors in Vietnam and Thailand are buying gold simply to protect themselves from currency devaluation and inflationary losses.
The gold-buying spree in Vietnam and Thailand reflects a larger trend: strong gold demand in Asia, with gold flowing from Western countries to the East. Pierre Lassonde, Chairman Emeritus of Franco-Nevada Corp (TSX: FNV) (NYSE: FNV), recently pointed out that the marginal buyers of gold are no longer the United States or Europe, but China. While central banks and retail investors in China and India continue to buy gold on a large scale, Western investors are continuously selling it. With gold prices soaring, it is clear who the winners and losers are.
