Should you invest in gold or USD for high-return savings?

The decision to invest in gold or USD depends on many factors such as personal financial goals, risk tolerance, and market conditions. Both gold and USD are considered safe investment channels amidst the continuously fluctuating global economy. However, each of these investment methods has its own distinct characteristics, and the right choice will bring optimal returns to investors. Let's find out with Jemmia!

Gold – A Stable and Safe Investment Channel

Gold has long been considered an effective asset protection tool in all periods. In the context of economic fluctuations and inflation, gold maintains its value, helping to protect investors' assets from currency devaluation. The outstanding characteristics of gold are:

Inflation Hedge

One of the biggest advantages of gold is its ability to hedge against inflation. As inflation rates rise, the value of currency tends to decrease, while the price of gold tends to increase. This happens because gold is considered a tangible asset with a fixed value, not directly affected by monetary policies or changes in national currency.

For example, during periods of high inflation, currencies may depreciate, but gold maintains or increases its value. Investing in gold helps protect assets from the devaluation of money over time.

High Liquidity

Gold has high liquidity, meaning investors can easily buy and sell gold in the market. Selling gold to convert it into cash or other assets can be done quickly without many issues. Furthermore, gold is not bound by strict regulations like USD in Vietnam, making it easy for investors to trade.

Gold has high liquidity

Safe Haven Asset

During periods of political or economic instability, or war, gold is often chosen by investors as a safe haven asset. Gold prices often rise during these times due to financial market and economic instability. Gold is not affected by political factors or government decisions, making it an effective tool for protecting asset value.

Example: Gold price broke record highs due to geopolitical and economic instability in 2024-2025

• In early 2025, the gold price hit a record high, surpassing $3,000 per ounce for the first time. 
• Reasons for the increase include: fears of trade wars, global political tensions, inflation, and investors' loss of confidence in financial markets. 
• Additionally, central banks are also actively buying gold to diversify reserves against risks related to the USD and inflation. 

Timeless Value

Gold has been known and used for thousands of years, and its value is widely recognized globally. Gold does not become obsolete and always maintains its value through the centuries, thus becoming a reliable asset for long-term value accumulation.

However, investing in gold is not without its risks. One of the common issues is the price difference between the domestic and international gold markets. When domestic gold prices are much higher than world prices, investors may face difficulties in optimizing profits when selling. The gold market can also be affected by other factors such as exchange rates and government gold price adjustment policies.

USD – A Stable Investment Channel but with Some Risks

The USD is the international reserve currency, so investing in the USD is also considered a safe investment channel. However, investing in the USD also comes with factors to consider. The advantages and disadvantages of investing in the USD can be listed as follows:

Advantages

High Stability 

The USD has superior stability compared to many other currencies. As the world's primary reserve currency, the USD is less subject to strong short-term fluctuations. Investors can feel secure when depositing money or investing in USD, especially in contexts where national economies are unstable.

Easy to Buy and Sell 

Trading USD is very easy and convenient. Investors can buy and sell USD through commercial banks, gold shops, or foreign exchange counters without encountering many restrictions. This makes asset conversion quick and easy.

High Liquidity 

The USD is a currency with extremely high liquidity, especially in the international market. USD can be easily converted into other currencies or other assets without much difficulty. This allows investors to quickly disburse funds or convert assets when needed.

USD is a currency with extremely high liquidity, especially in the international market

Disadvantages

Legal Limitations 

Although the USD is considered a strong currency, trading and holding large amounts of USD in Vietnam faces some legal limitations. The State Bank of Vietnam has regulations to control the trading and holding of foreign currencies, which makes buying and selling USD in large quantities more difficult.

Exchange Rate Fluctuation Risk 

The exchange rate of the USD can change according to economic, political, and global event factors. Exchange rate fluctuations directly affect the value of your investment when calculated in other currencies. Therefore, investors need to regularly monitor market conditions and factors affecting the USD to make informed decisions.

The Relationship Between Gold and USD

An important factor to consider is the relationship between the price of gold and the value of the USD. They have a rather clear inverse relationship. When the price of gold rises, the value of the USD tends to fall, and vice versa.

• When the USD is strong: When the USD strengthens, investors tend to pour capital into the USD, which reduces the value of gold. This usually happens when the economy is stable and inflation is not rising too rapidly, leading to a decrease in demand for gold.

• When gold is strong: Conversely, during periods of economic instability or when concerns about inflation rise, investors often turn to gold as an asset protection tool, causing gold prices to rise and the USD to weaken.

Should you choose to invest in gold or USD?

Both gold and USD have their own advantages and disadvantages. If you are a worker with a small capital, gold can be an attractive option, because

Small Investment Capital: You can start investing in gold with a very low capital, from just a few million Vietnamese Dong. This allows you to easily enter the market without needing too much initial capital.

Easy to Manage: Gold storage and trading are also very simple. You don't need a lot of specialized financial skills or knowledge to invest in gold, as it is not affected by factors like exchange rates.

High Profit Potential: In the long term, gold prices tend to increase, especially when factors like inflation or financial crises escalate. This offers great profit potential for investors.

Conversely, if you prioritize stability and high liquidity, the USD will be a suitable choice, especially in a stable financial environment. However, you need to closely monitor exchange rate fluctuations and have an understanding of the forex market.

See also:

• Should you buy gold or deposit savings to accumulate profits?
• Should you buy gold bars or jewelry to accumulate high profits?
• Should you buy SJC gold or bar gold?

Emerging Trend: Diamond Investment 2025

When it comes to safe haven channels, many people wonder whether to invest in gold or USD. Both are traditional assets with high liquidity. However, in recent years, diamonds have started to gain attention from many investors and consumers as an alternative.

The difference of diamonds compared to gold and USD lies in:

• Scarcity: Natural diamonds cannot be mass-produced, and the reserves are increasingly limited.

• Dual Value: In addition to investment value, diamonds also possess aesthetic and symbolic value.

• Price Fluctuation: The price of natural diamonds is not directly affected by exchange rates or monetary policies, so their fluctuations are often independent of gold and USD.

Unlike gold or USD, which can be easily bought and sold daily, diamonds are more suitable for those who need long-term storage or link them with usability (jewelry, keepsakes). If you buy diamonds both for luxurious high-end jewelry and as a durable asset, choose reputable brands with buy-back or exchange policies to secure your assets.

Refer to: How Much Loss When Selling a Diamond Ring?

Conclusion

The choice between gold and USD for investment depends on financial goals, risk tolerance, and current market conditions. Gold is an ideal long-term investment channel with inflation hedging capabilities and stability in any circumstance. Meanwhile, USD offers stability and high liquidity, but has some risks regarding exchange rates and legal factors.

Each investment method has its own advantages, and you need to carefully consider and make a decision that suits your personal financial situation.