Setting the Gold Market Free

People still face difficulties in transactions

The price of SJC gold bars has remained at VND 79.8 million per tael, following the global price increase. The price of gold rings has also been maintained at nearly VND 78 million per tael. However, the business situation at some major jewelry stores in Hanoi is very gloomy. Most shops have announced that they have not had SJC gold bars for almost two months. Some stores sell plain gold rings within fixed hours.

Moving along Tran Nhan Tong street, which is famous for its gold shops, in Hai Ba Trung district, Hanoi, Mr. Nguyen Tien from Thanh Xuan district has not been able to buy any gold rings. “I arrived at 9 am to be ready to line up to buy gold rings. But as soon as I got there, the staff announced that there were no gold rings for sale that day and the store was unsure if there would be any sales that day,” shared Mr. Tien. Ms. Minh Ngoc from Hoang Mai district has also never successfully placed an online order from the four state-owned banks or SJC Company.

The difficulty in buying and selling gold at authorized SJC gold bar dealers has led to the clandestine operation of the “black market.” On Ha Trung and Hang Bac streets in Hoan Kiem district, Hanoi, gold bar transactions are still taking place. Most shop owners on these small streets say they do not buy or sell SJC gold bars but only deal in gold and silver jewelry and plain gold rings of various sizes.

However, this is just the surface. If customers want to buy or sell gold bars of 10 taels or more, their demands will be met, but the price will be VND 4-5 million per tael higher than the price listed by large enterprises.

While the gold bar market is challenging to buy from as it is now, in Ho Chi Minh City, SJC Company announced that it would not buy SJC gold bars with one logo. This has frustrated people as the market is already difficult to buy gold from, and now it is also difficult to sell it back to the producer.

This issue has led SJC Company to announce that it will repurchase one-logo and deformed gold bars from August 5. This decision was made after the State Bank granted a processing limit for the gold bars the company has in stock. According to Ms. Le Thuy Hang, Director of SJC Company, the company will repurchase one-logo gold bars at the same price as the two-logo gold bars currently in circulation.

The reason is that the company still has about 1,000 taels of gold that it has purchased in the past two months. Meanwhile, this enterprise has not been allowed by the State Bank to open a workshop for processing and restamping gold. The stockpile of gold cannot be sold to the market. Therefore, the company asks customers to wait until the processing of this gold is completed before they can resume purchases. “The process of waiting for permission to restamp one-logo and deformed gold bars into new ones takes a long time, and the increasing stockpile affects the company’s capital balance,” said Ms. Hang.

The People’s Committee of Ho Chi Minh City recently announced that it would establish a task force to ensure the security of the gold market, collect information on gold bar buyers and sellers, and forward it to the police. In reality, over the past two months, the recording of customer information, including full name, identity card number, phone number, email, and address, has been taking place at the four banks and SJC Company.

Ms. Nguyen Thoa from Hanoi expressed her concern: “How much gold purchased will be considered speculation and hoarding? For example, I bought 10 taels of SJC gold, but after three months, I sold it at the right time when the gold price increased and made a considerable profit. Is that speculation, or is it simply a profit-taking activity?”

Mr. Nguyen The Hung, Vice Chairman of the Vietnam Gold Business Association, believes that administrative orders should not be applied to manage the gold market. He thinks that establishing a task force to ensure the security of the gold market is unnecessary. “Currently, the gold bar market has been stable for a long time. We also have a series of regulations related to anti-smuggling and anti-gold speculation, such as the Prime Minister’s Decision 11, which stipulates that transactions of gold worth VND 400 million and above must be reported. The Ministry of Public Security, the tax agency, and the customs department have also taken action. Gold should be returned to the market,” said Mr. Hung.

Attorney Truong Thanh Duc, Director of ANVI Law Firm, also believes that “Considering both the market context and the legal basis, there is no need for a task force to ensure the security of the gold market.” There have never been any regulations prohibiting people from buying large amounts of gold.

Moreover, anti-speculation activities usually only appear in special contexts, such as during storms, floods, or droughts, when certain products, such as food and essential goods to ensure people’s daily lives, become scarce.