The Alluring Allure of ‘Black Market’ Gold: High Prices, Easy Sales, Elusive Purchases

On June 28th, amidst the bustling streets of Ha Trung in Hanoi’s Hoan Kiem district, a clandestine gold bullion trade was taking place. Most shop owners along this small street revealed that they neither bought nor sold SJC gold bullion; instead, they dealt only in gold and silver jewelry and various sizes of round rings.

“The government is stabilizing gold bullion prices, and people are only interested in buying for hoarding purposes, so there is very little gold bullion floating in the market. We also don’t deal in this type of gold,” shared a shop owner.

However, this was merely the tip of the iceberg. If customers wished to sell gold bullion and had the necessary paperwork, these shops were more than willing to offer a premium to purchase it. One shop owner on Ha Trung Street quietly punched “79.5” into a pocket calculator and showed it to our reporter, indicating his willingness to buy SJC gold bullion at VND 79.5 million per tael.

Meanwhile, the buying price of SJC gold bullion quoted by banks and gold and silver businesses was VND 74.98 million per tael. This meant that the black market price was a whopping VND 4.52 million higher than the official market price.

When asked about purchasing 1 or 2 taels of SJC gold bullion on the black market, customers were told that there was none available for sale. Some shop owners even advised customers to place their orders online at official gold retailers, assuring them that their turn would eventually come.

However, if a customer expressed a desire to purchase a larger quantity (over 10 taels), these shop owners would discreetly try to entice them, whispering that they could provide as much gold as they wanted.

“We always have stock, but the price is a little higher than the state-controlled price because we need to make a profit,” said the owner of a gold shop on Hang Bac Street. Their selling price for SJC gold bullion was quoted at VND 80.5 million per tael, VND 3.5 million higher than the official market price of VND 76.98 million per tael at the same time.

Several gold shop owners confirmed that the SJC gold bullion traded on the black market came from individuals who had successfully purchased gold bullion from banks and were now reselling it on the black market to profit from the price difference. However, the supply was limited.

Since the State Bank of Vietnam started selling gold bullion through four commercial banks, the domestic gold market has stabilized. As of June 28, gold prices have dropped significantly and are now closer to world prices, only about VND 5 million higher per tael. On that day, the selling price of SJC gold bullion by the four state-owned commercial banks and the SJC company remained unchanged at VND 76.98 million per tael, marking the 16th consecutive session of stable gold prices.

Previously, the State Bank had warned that certain individuals were hiring people to queue and buy gold in bulk to drive up prices, make profits, and destabilize the market, harming the economy. The Bank requested the Ministry of Public Security to coordinate with relevant units to verify and strictly handle acts of spreading false information, speculation, profiteering, and market manipulation.

The State Bank also stated that it would proactively implement measures to combat speculation and hoarding. One such measure is the shift to online gold sales, where banks and the SJC company only sell gold to those who have successfully registered online and limit purchases to a maximum of 1 tael per customer. This has eliminated the sight of long queues outside gold shops and the practice of hoarding gold to sell at a higher price later.