The Golden Rush: Uncovering the Hidden Market of Gold Bars

Last weekend, the global gold price set a new peak, surging $51 to $2,507 per ounce, far surpassing the previous record of $2,483 set on July 19. Notably, the global gold market has been turbulent for the past two months, while the domestic gold market has been exceptionally calm following the vigorous moves of the Government and the State Bank to stabilize the gold price.

Very few direct transactions

Especially, the SJC gold bar price has been stagnant at VND 78 million per tael for buying and VND 80 million per tael for selling, which is VND 12.4 million lower than the record high set in May (VND 92.4 million per tael) when the global gold price exceeded $2,350 per ounce. The stagnant SJC gold bar price has made speculation in this type of gold almost ineffective, even leading to losses. Therefore, the market demand for this type of gold has noticeably decreased. Saigon Jewelry Company (SJC) and four state-owned commercial banks are no longer “struggling” to meet the people’s demand for gold bar purchases as they did two months ago.

According to an SJC store employee in Ho Chi Minh City, customers who want to buy SJC gold bars only need to register and provide personal information at the website https://tructuyen.sjc.com.vn to be able to purchase between 1 and 3 taels of gold without queuing, crowding, or being limited to 1 tael as before. “As for gold rings, all our stores have run out of stock for the past month, so we don’t have any for sale,” the employee said.

In the free market, some jewelry stores traded SJC gold bars at VND 80.1 million per tael for buying and VND 80.7 million per tael for selling, VND 700,000 higher than the gold price at SJC and commercial banks. The price gap between SJC gold bars in the official channel and the free market is currently less than VND 1 million per tael.

The owner of a jewelry store in Ho Chi Minh City said that if previously about ten people inquired about buying SJC gold bars per day, now there are only 1-2 people. “Quite a few people want to sell gold bars that they bought at VND 78-79 million per tael to take profits. There is still demand for gold bar transactions in the free market, but it’s not as bustling as before. Those who need to buy gold bars have already done so, and the market can be said to be saturated. Some of my customers also mentioned that they were able to buy gold bars more easily through online registration with banks and SJC,” the owner said.

Talking to the Laborer Newspaper, a leader of the State Bank said that recently, due to the unpredictable fluctuations in the gold price, about 20-30% of customers canceled their transactions after registering to buy gold online at commercial banks and SJC, no longer rushing to buy as before.

Bustling gold buying on social media

While gold buying and selling at SJC, commercial banks, and jewelry stores are quite subdued, even sluggish, there are still many people advertising to buy and sell large quantities of gold bars on social media, groups, and networks. “Many others may have stopped, but we are still buying SJC gold. If anyone has gold, please call 078 398…! I need to buy 20 taels at a high price” – a Facebook account named Hong Phuc Ngoai Te offered in a gold buying and selling group.

We contacted this account, expressing our intention to sell 10 taels of SJC gold bars and 50 SJC gold rings (equivalent to 5 taels). The account holder asked us to come to the address at 47 Lang Ha, Hanoi, for the transaction or provide our address so that they could send someone to buy the gold from our home. The transaction money would be transferred to our account. “SJC gold bars are bought at VND 80.3 million per tael, VND 2.3 million higher than the price of SJC Company, which is VND 78 million per tael. For SJC gold bars that are deformed, the buying price is VND 79 million per tael. As for SJC gold rings, the buying price is VND 73 million per tael, VND 300,000 higher than the company’s price. These prices may change if, at the time of the transaction, the global gold price and the gold price at commercial banks and SJC fluctuate,” the account holder sent detailed information.

“If someone wants to buy 10 taels of SJC gold bars, what would be the price, and is there an invoice?” we asked. The account holder said: “Most of the SJC gold bars we sell to customers have clear origins. That is, people buy gold from banks and then sell it with invoices. Then we sell it to others at VND 80.5 million per tael.”

In addition, on social media groups, personal pages, and fan pages, it is not difficult to find advertisements and offers to register to buy gold “on behalf of others” with commitments of “trustworthiness, with a success rate of more than 90%”, receiving gold first before getting the service fee, or providing a QR code for payment, sending a confirmation email before receiving the fee, not accepting deposits, etc.

Talking to the Laborer Newspaper about the gold buying sources on social media, Mr. Tran Huu Dang, General Director of ASEAN Jewelry Joint Stock Company (AJC), said that recently, in Ho Chi Minh City and Hanoi, there have been quite a few gold buying sources that are individuals who do not register for gold business and do not open jewelry stores. They often collect SJC gold bars in the market to sell to speculators in batches of 10-20 taels each time. Meanwhile, enterprises licensed to trade SJC gold bars always buy and sell at prices equal to those of banks and SJC. However, customers trading this type of gold are very few and far between.

The owner of a jewelry store in Ho Chi Minh City said that in the past two weeks, jewelry stores have almost stopped buying and selling SJC gold bars for fear of being inspected and sanctioned by competent authorities. In addition, the situation of speculators hiring people to register to buy gold online has also decreased significantly as these subjects are concerned about being “targeted” by the police, and some banks restrict those who have bought gold online from registering again for a certain period.

A leader of the State Bank warned: “People buying SJC gold bars in the free market may face risks because the seller is not a gold business enterprise, does not have transaction vouchers, and may provide fake gold to the buyer.”