Trade not in legal framework, as bullion restriction takes effect

The bullion market developed complex hassles on the very first day of the law on bullion restriction taking effect.

Gold price on the first day kept fluctuating, depending on the psychology of customers and amount of selling and buying. Some 2,500 newly licensed gold-bullion trading facilities were set to replace tens of thousands of unqualified businesses countrywide starting on January 10.

These are branches of 22 local banks and 16 businesses meeting the conditions of the State Bank of Vietnam to trade in the precious metal. The remaining below-par facilities are required by SBV to stop trading in gold.

Consequently, people flocked to Saigon Jewelry Co (SJC) to make transactions. Here, a bustling scene was seen on the day with many customers coming to sell or buy gold. Nguyen Cong Tuong, SJC’s deputy sales manager, said that in the morning many people sold the precious metal resulting in drop in price within one hour from more than VND46 million to VND45.7 million per tael. Yet, in the afternoon, a large number of people bought gold, causing it to surge to VND46 million per tael. One thousand tael of gold sold on the first day.

The selling price of gold bullion produced by Saigon Jewelry Co (SJC), the gold bullion monopoly, was at VND46.43 million a tael as of Wednesday evening, still VND4.63 million more expensive than  world price.

Due to bullion restriction regulations, people are turning to gold rings as safe buy. More and more people prefer gold rings as the price of domestic gold bullion was too high compared to world price, plus the fact the network of buying and selling gold bars will shrink in accordance with the central bank’s regulation taking effect today that restricts gold bullion trading.

However, although not displaying the price of SJC gold in the bulletin billboard, small gold shops around Ho Chi Minh City keep transition to SJC bullion when customers demand. A store assistant in Phan Dinh Phung Street in Phu Nhuan District quoted VND4.46 million and VND4.62 million for one tenth of a tael for the bid and ask price respectively. Similarly, others in Le Quang Dinh Street in Binh Thanh District and Vuon Chuoi Street in District 3 continued selling the gold on demand from familiar customers.

By Hanh Nhung - Translated by Uyen Phuong

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