Difficult to buy and sell gold, people have to turn to the 'black market'
At the end of July, Ms. Nguyen Thi Loan in Vinh Phuc wanted to buy 5 taels of SJC gold bars to pay off her debt. However, after many days of struggling to register online, she was only able to buy 1 tael of gold. If she wanted to buy the second tael, she would have to wait 3 months. That means it would take her a whole year to buy enough gold.
Fearing a sharp increase in gold prices, in early August, she had to buy gold on the "black market" at a price 3 million VND/tael higher than the listed price at banks.
“Work is busy, registering to buy gold online is also very difficult, often has errors, so I have to accept buying expensive outside,” she said.
In fact, in recent months, many people who need SJC gold rings and gold bars have had difficulty buying them. Because banks are selling gold “drop by drop”, while most businesses have announced that they do not have gold bars or gold rings. A few stores said that if they want to buy gold rings, they have to wait 10-15 days.
In contrast to this situation, on the “black market”, the buying and selling of gold bars and gold rings is bustling with a price difference of 1-5 million VND/tael, depending on the type and time. On social networks, there are also groups accepting registrations and selling online gold purchase registrations at 4 banks for 300,000 VND/registration.
Economist Associate Professor Dr. Dinh Trong Thinh remembers that in the past, his family also had many Kim Thanh gold bars – a very rare type of gold at that time. When he needed money, he had to secretly sell it, and buying this type of gold was even more difficult.
“Now, the buying and selling situation in the market is similar to the “subsidy period”, Mr. Thinh compared. “Because 4 commercial banks sell limited quantities, and gold shops, according to the reflection, are out of gold rings and gold bars. People are forced to turn to the “black market”.
According to expert Tran Duy Phuong, the State Bank of Vietnam (SBV) has recently had many successes in managing the gold market. The assignment of 4 commercial banks and Saigon Jewelry Company Limited to sell SJC gold bars has shortened the gap between world gold prices and domestic gold prices, from 17-18 million VND to an average of 4-5 million VND/tael. He assessed that this is a positive signal, bringing gold prices to a good level this year.
However, the market is in a situation where businesses still list the price of gold bars, but when people come to buy, they do not sell. Meanwhile, the amount of gold sold by banks is limited, each person can only buy 1 tael and 3 months later can register to buy more.
Therefore, those who are in a hurry to buy gold and are afraid of price increases should choose to buy on the “black market”. In June, the price of SJC gold bars on the “black market” was 4-5 million VND/tael higher than the listed price at banks. By July and August, this difference had decreased to about 1 million VND/tael, Mr. Phuong said.
Need for more banks to sell gold
To resolve the above situation, expert Tran Duy Phuong said that the State Bank should not continue to intervene administratively in the gold market. It is time to let the gold market operate according to its own rules. The State Bank is behind the scenes monitoring, if the market has unusual movements, it will participate in making adjustments as it has done recently.
“The possibility of the previous situation of gold price fluctuations will no longer exist,” he said. This expert analyzed that from April to August this year, the amount of SJC gold bars that were stable and the amount of auctioned gold released to the market was very large, up to more than 300,000 taels. Thus, the market is no longer too scarce in SJC gold.
Previously, the price of gold increased because there was no supply. In the past 2-3 months, the supply has gradually increased, so the possibility of gold shortage will not be like before, he said.
In fact, the difference between domestic gold price and world price has narrowed to 4-5 million VND/tael. Therefore, the State Bank of Vietnam needs to consider returning the gold mechanism to the market, so that all places can be equal in buying and selling gold, and people can buy anywhere.
In case the State Bank still decides to participate in price stabilization, according to him, the target group for gold sales should be expanded. Instead of just 4 state-owned commercial banks and SJC Company as at present, there should be more banks participating in gold sales. These banks can buy gold from the State Bank to sell, contributing to meeting people's gold buying needs.
This expert also reiterated the need to consider removing the monopoly on SJC gold bars. Because, when the monopoly on SJC gold bars is removed, other gold bar brands on the market will compete on price, and people will also have the right to choose from many different gold brands to buy.
However, that is only a solution to stabilize the SJC gold bar market. As for the scarcity of gold rings, according to Mr. Phuong, it is still necessary to import raw gold.
He pointed out that businesses want to produce gold rings and gold jewelry but currently do not have raw materials. To have gold products to sell to people, businesses must buy gold raw materials with clear invoices and documents. But this is extremely difficult. Because the amount of gold raw materials with documents is small, the amount sold on the market is also small.
For more than 10 years, raw gold has not been imported, so he suggested that the State Bank should consider allowing imports based on the needs of businesses. It is possible to grant quotas to businesses to import raw gold or the State Bank can directly import and then redistribute.
According to Mr. Phuong, if the issue of raw gold is not resolved, gold trading activities on the "black market" will continue, pushing risks onto the people because the quality is not monitored.
In addition to the above solutions, expert Dinh Trong Thinh said that gold-selling banks and businesses need to be transparent about the amount of buying and selling with the State Bank. When there is standard data on market supply and demand, this agency will issue appropriate policies on management, purchase and import of raw materials. From there, the supply and demand of gold in the market will be balanced.
Borrowing gold, restless because unable to buy gold to pay off debt Gold prices have been stable for a long time, but people have difficulty buying gold bars. Many customers complain when they cannot buy gold bars to pay off debt from many years ago.
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