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Prices keep falling for all gold bullion without crucial brand
Gold bullion that does not bear the Sai Gon Jewellery Company (SJC) brand continues to face dramatic price cuts, even though the State Bank of Viet Nam (SBV) has said that all brands of gold bullion are priced at an equal rate.
SBV recently announced that anyone holding gold bullion of other brandnames could exchange their precious metals for SJC-branded gold bullions at an equal price, and that non-SJC brand gold could still be used later.
The decision came after the SBV governor announced before the National Assembly that SJC would become the gold brand of the central bank, and that the company would come under the direct management of the central bank. This move sent gold prices into a tailspin.
In spite of the central bank's announcement, the prices of non-SJC branded gold have continued to fall because people are worried about the fate of other gold brands, and have rushed to sell them, according to independent market observers.
This has caused great losses for people who hold non-SJC-branded gold.
As a result of this sitation, the gold from Bao Tin Minh Chau Jewellery Company is sold from VND200,000 to VND1 million lower than the rate of SJC bullion.
Late last week, people sold gold from Bao Tin Minh Chau at VND44.3 million a tael and bought SJC-brand gold at VND45.23 million.
Agribank's gold trading company also sold its gold at VND500,000 and VND700,000 a tael (37.5 grams, 1.2 troy ounces) less than that of SJC-branded gold.
The non-SJC branded gold-trading companies have tried to cut their gold prices to make their products more attractive to customers, but people have still refused to buy their gold.
Meanwhile, gold shops also do not want to buy non – SJC branded gold bullions from customers.
A SJC representative also told Nguoi Lao Dong newspaper that the company would buy non-SJC branded gold only when buyers agreed to allow them to have their gold tested for quality.
The companies that want to hire SJC to manufacture gold for them would have the required documents, the company said.
Dr.Vu Dinh Anh, a senior economic expert, said all gold bullion 9999 were the same, so there should not be a big difference in the price of gold bars bearing the names of different brands.
A pricing gap would result in losses to people only, Anh said.
A deputy director of a gold trading company in HCM City, who did not want to be named, said there was a great deal of official and unofficial information on the management of the domestic gold market. This has confused and worried the public.
Although the central bank named companies that were responsible for supplying SJC-branded gold bullion to the market, people still found it difficult to buy this gold, according to Cao Ngoc Thi Ngoc Dung, general director of the Phu Nhuan Jewellery Company (PNJ).
PNJ has dozens of shops nationwide but the latter did not have SJC-branded gold for sales, Dung said.
She called for the central bank to develop clear regulations on the distribution of SJC gold to avoid price differences.
Anh said if the decree was issued, the central bank mush have the responsibility to protect the interests of the people who are holding non-SJC branded gold billion.
The Government should also have regulations that stipulates an exchange from non-SJC branded gold to SJC-branded gold at reasonable charges to ensure people's interests, he said.
In light of the new draft decree on bullion market management, only businesses with a minimum registered capital of VND500 billion ($23.8 million) and holding at least 25 per cent market share in the last three years will be licensed to make gold bars.
Gold trading firms are required to have a minimum registered capital of VND100 billion ($4.7 million), two years of experience in trading gold, and a dealer and shop network in at least three provinces and cities.
Moreover, only those that have tax payments of at least VND500 million ($23,800) a year during the last two years are eligible for licensing.
vietnamnet
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