The State Bank of Vietnam’s Decree 24/2012 stipulates that only enterprises and banks licensed by the State Bank are permitted to trade in SJC gold bars. This means that gold bar transactions in small shops are considered illegal. However, in recent days, as gold prices hit new highs, the black market has been bustling. Numerous social media groups have seen a flurry of accounts buying and selling dozens of gold bars and rings.
Soaring Prices
On the evening of August 25, Saigon Jewelry Company (SJC) set the buying price of SJC gold bars at 125.6 million VND per tael and the selling price at 127.1 million VND per tael, an increase of half a million VND from the previous day, far surpassing previous records.
Similarly, the buying and selling prices of 99.99% pure gold rings and jewelry climbed to 119.1 million VND per tael and 121.6 million VND per tael, respectively, a 600,000 VND increase from August 24. In the international market, the trading price hovered around 3,366 USD per ounce, equivalent to over 107.3 million VND per tael when converted according to the listed exchange rate, significantly lower than the domestic price by 18-21 million VND per tael.
According to regulations, only enterprises and banks licensed by the State Bank are allowed to trade in SJC gold bars. Photo: LAM GIANG
The significant gap between domestic and international gold prices has raised concerns among many people. Mr. Le Khanh, a resident of Bay Hien Ward in Ho Chi Minh City, shared that at the beginning of August, when the gold bar price stood at 123 million VND per tael, he intended to purchase a small amount for savings but hesitated, believing the price was too high.
The rising gold prices further stimulate the demand for gold among the public, as they anticipate further price increases. However, acquiring gold bars at this time is not without challenges. At SJC stores, customers have to queue and are limited to purchasing only one tael. Several other gold companies and licensed commercial banks face similar shortages. “Customers need to leave their information, and we will contact them when we have a supply,” said a staff member of a commercial bank in Ho Chi Minh City.
The atmosphere in the black market is equally “tense.” Some small shops in Ho Chi Minh City quoted buying and selling prices at 127.9 million VND and 128.9 million VND per tael, respectively, nearly 2 million VND higher than the large companies. However, purchasing gold from these shops is not straightforward, often requiring a 10% deposit and a two-day wait for the gold to be sourced. Meanwhile, online groups and social media platforms have become hotbeds for SJC gold bar transactions.
Severe Penalties
Gold expert Tran Duy Phuong opined that the purchase and sale of SJC gold bars by some small jewelry shops, albeit in small quantities and usually limited to regular customers, could still be considered part of the “black market” as they lack the necessary permits. “If people buy SJC gold bars through online groups or social media, they face even higher legal risks, not to mention the possibility of encountering low-quality, fake gold, or falling victim to scams,” the expert warned.
Attorney Truong Thanh Duc, Director of ANVI Law Firm, emphasized that all unauthorized gold bar transactions are subject to penalties. Decree 88/2019 clearly states that buying and selling gold bars with unlicensed organizations can result in a warning, while enterprises engaging in illegal gold trading face fines ranging from 300 to 400 million VND. Additionally, the illegal gold may be confiscated, and the business license may be revoked for a period of 6 to 9 months. “The regulations and heavy fines of up to hundreds of millions of VND are in place. However, due to the high profits and difficulties in detection, illegal gold transactions continue to occur. The gold market has shrunk compared to the past and no longer significantly impacts exchange rates, inflation, and the macroeconomy. Nonetheless, regulatory authorities need to implement stringent control measures to prevent gold from becoming a speculative channel that negatively affects the macroeconomy. Completely eradicating illegal gold trading is extremely challenging,” Attorney Truong Thanh Duc stated.
Enhanced Inspections
In a response to voters, the State Bank of Vietnam asserted that it would only intervene when gold price fluctuations adversely affect foreign currencies, exchange rates, and monetary policies. Currently, the bank is collaborating with ministries and sectors to evaluate the implementation of Decree 24/2012 and draft a replacement decree to tighten management and adjust mechanisms to align with practical needs.
Moving forward, the State Bank of Vietnam will strengthen inspections and supervision to ensure transparency in the gold market and strictly handle speculative and manipulative behaviors. However, price stabilization is not an urgent short-term task unless there is a significant impact on the macroeconomy.
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