Buying gold on the open market results in daily losses of tens of millions of dong per ounce.
Most opinions suggest that after the elimination of the monopoly, domestic gold prices will generally fall sharply. However, this has not happened. The precious metal has continuously reached and broken new highs, and the gap between domestic and international gold prices has not narrowed but has widened. For example, last week, domestic gold prices fluctuated sharply and recorded unusual phenomena. After reaching a record high of 154.6 million VND per tael at the beginning of the week, the price of SJC gold bars was blown away by nearly 6-7 million VND/tael just two days later and continued to fluctuate within a wide range of 1-3 million VND per tael, which rarely happens. By yesterday, October 25th, companies such as SJC, Doji ... increased the price of gold bars by 700,000 VND per tael, to 147.2 million VND for buying and 149.2 million VND for selling; Bao Tin Minh Chau Company bought gold at 148.2 million VND and sold it at 149.2 million VND; Phu Quy Company bought gold at 146.7 million VND and sold it at 149.2 million VND per tael…
SJC gold bar prices fall sharply.
PHOTO: DAO NGOC THACH
The price of gold rings at gold trading companies increased by 400,000 - 700,000 VND per tael. Bao Tin Minh Chau Company had the highest price for gold rings on the market, buying at 150 million VND and selling at 153 million VND/tael; Phu Quy Company bought at 146.2 million VND and sold at 149.2 million VND; Doji Group bought at 146.5 million VND and sold at 149.1 million VND; SJC Company bought at 146.1 million VND and sold at 148.7 million VND/tael…
Chart showing the price fluctuations of SJC gold bars from October 19th to 25th (Unit: 1,000 VND/ounce)
As can be seen, just yesterday, the price of SJC gold bars decreased by a total of 5-6 million VND per tael, while gold rings decreased by 7-7.5 million VND. Those who bought gold bars at the beginning of the week are now losing 7-8 million VND per tael; and those who bought gold rings are losing 10-11 million VND per tael. Those who bought gold on the free market suffered even heavier losses, up to 12-34 million VND per tael if they bought gold at a price of 160-180 million VND.
Domestic gold prices are strongly influenced by global precious metal prices. Over the past week, world gold prices fluctuated sharply within a range of $4,000 - $4,380 per ounce, sometimes increasing or decreasing by $50 - $130 per ounce in just a few hours. On October 25th, world gold prices closed the week at $4,112 per ounce. Thus, compared to the peak reached at the beginning of the week, world gold prices have decreased by $270 per ounce, at times losing $340, equivalent to 7.8%. Domestic gold prices are becoming increasingly expensive. SJC gold bars are higher than world prices by 18.6 million VND/ounce, while gold rings are higher by 17.6 - 22.4 million VND/ounce.
In particular, gold prices on online marketplaces have fallen just as rapidly. On the Gold Trading forum, the price of Bao Tin Minh Chau gold rings is being offered at 155-156 million VND/ounce. Meanwhile, those holding SJC gold bars are still demanding prices as high as 166 million VND/ounce…
Despite domestic prices being significantly higher than international prices, gold trading companies are running out of gold to sell. A representative from SJC stated that each person is only allowed to buy one tael of gold when a customer comes to sell their gold. Due to the sharp drop in prices, fewer people are bringing gold to sell than in previous days. Meanwhile, Bao Tin Minh Chau Company announced a temporary shortage of gold.
Strange developments
Two weeks after the official removal of the gold bullion monopoly and the import of raw gold, it was expected that the market would improve. However, unprecedented and strange events occurred and lasted for many days. These included: domestic gold prices increasing by 20-25 million VND per tael instead of narrowing the price difference; the price of gold rings from Bao Tin Minh Chau Company being higher than the listed price of SJC gold bullion; and chaotic black market gold prices, with offers reaching 170-180 million VND per tael for SJC gold bullion or 160-166 million VND per tael for gold rings...
Mr. Huynh Trung Khanh, Vice Chairman of the Vietnam Gold Business Association, also acknowledged that the gold market has never seen such strange and illogical phenomena as it does now. For example, the price of gold rings from Bao Tin Minh Chau Company is 5-8 million VND/ounce higher than that of gold bars, depending on the time. Furthermore, the buying price of gold rings is even higher than the buying price of gold bars. Mr. Khanh believes this all stems from the scarcity of gold in the market. More than two weeks have passed, but the market still lacks official information and supply sources. All gold traded on the market mainly comes from individuals. According to the roadmap of Circular 34, companies are currently applying for licenses to produce gold bars, then applying for licenses to import raw gold, as well as establishing a gold import and export quota council… Therefore, import quotas will not be available until early December, and it is possible that no unit will be granted a license to import or produce gold bars until early next year. That means the market will only have supply at that point.
"From now until the end of the year, if there is no new supply in the market, the possibility of shocking fluctuations will continue to recur, along with the unpredictable volatility of precious metals in the world market. However, another solution is for the State Bank of Vietnam (SBV) to intervene by selling gold, as it did in 2024, through banks and businesses," Mr. Khanh predicted.
Associate Professor Nguyen Huu Huan (Ho Chi Minh City University of Economics ) further explained that the regulations in Decree 232 or Circular 34 are only necessary conditions; the main issue in resolving bottlenecks in the gold market remains the supply. Businesses wanting gold need raw materials for production, and to obtain them, they must import because Vietnam does not have gold mines. The scarcity of gold while demand is higher is what leads to the strange phenomenon of people queuing for 3-4 hours just to buy one tael of gold. Currently, the market is waiting for the State Bank of Vietnam to license which businesses and banks are allowed to import and produce gold bars. Only when the market has a supply of gold will the aforementioned problems be resolved. According to Professor Huan, before 2012, Vietnam imported an average of about 50 tons of gold annually. Recently, statistics show that the three largest gold trading companies, accounting for about 30% of the market, need approximately 6 billion USD worth of gold. However, the State Bank of Vietnam is unlikely to grant such a large quota because it involves the foreign currency needed to import gold, which could amount to tens of billions of USD.
Increased risk
Domestic gold prices have risen sharply recently as the precious metal's price increased globally, but have declined rather slowly since the global trend reversed. Next week, the US Federal Reserve (Fed) will meet to discuss interest rates; a rate cut would be a factor supporting a rise in gold prices. Domestic prices are not directly linked to global prices due to limited supply, which could lead to unpredictable gold price movements towards the end of the year. With free market prices more than 20 million VND/ounce higher than those in authorized dealers, any investment or speculative trading carries significant risks. This is not to mention the issue of gold without proper documentation, counterfeit gold, etc. Therefore, people need to be cautious when buying gold.
Mr. Huynh Trung Khanh, Vice President of the Vietnam Gold Business Association
Source: https://thanhnien.vn/dien-bien-la-tren-thi-truong-vang-185251025181351371.htm
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