Long lines, short supply: Gold buyers flock to banks as prices dip

The Vietnam State Bank (SBV) yesterday announced its gold sale price to four state-owned commercial banks (Big-4) and Saigon Jewelry Company (SJC).

Customers coming to buy gold taels in Agribank – Saigon Branch yesterday (Photo: SGGP)

Accordingly, SBV’s announced gold sale price of VND77.98 million (US$3,068) per tael yesterday was a drop of VND1 million ($39) compared to the previous day, forcing other private gold selling stores to follow suit.

Right after receiving this announcement, the four state-owned commercial banks of Agribank, Vietcombank, VietinBank, and BIDV simultaneously posted the same retailed gold sale price of VND78.98 million ($3,107) per tael.

Early morning in HCMC, people waited in line in front of the branches of the Big-4 to buy gold bars. As these banks do not limit the purchase quantity, some have placed an order for 20 – 30 taels.

However, for transactions exceeding VND400 million ($15,740), banks required customers to report to the SBV to comply with anti-money laundering regulations. By around 4:00 p.m., all banks had announced that they had sold out of gold, allowing customers to place orders and collect their purchases the following day.

Y Nguyen Van from District 5 of HCMC, who successfully bought gold from BIDV – HCMC Branch, shared that his family traditionally buys gold as a form of savings and primarily purchases the SJC brand. He stressed that the gold price gap between Vietnam and the world of about VND6-7 million ($275) is acceptable for a major gold brand at this time.

A similar crowd can be spotted in front the of head office of SJC in HCMC. As the quantity of gold buyers is rather large, SJC limits purchases to 1 tael per person and prioritizes fulfilling orders for customers who had pre-registered and made deposits the previous day. Despite these measures, by around 10:30 a.m., the company had put up a "sold out" sign and asked customers to return early in the afternoon.

At 9:00 a.m. today, in HCMC, SJC reduces its buying price by VND500,000 and maintains its selling price compared to the previous day, setting its prices at VND76.98 million ($3,028) per tael for buying and VND 78.98 million per tael for selling.

Mi Hong Gold Store in Binh Thanh District of HCMC follows suit, announcing its gold buying and selling prices at VND77.4 million ($3,045) and VND78.98 million, respectively.

In Hanoi, Doji Corp. announces a gold buying price drop of VND700,000 and maintains its selling price, coming to the buying and selling prices of VND77.48 million and VND78.98 million, correspondingly. PNJ Co. shared the same gold buying and selling prices as SJC.

Gold prices for 9999 gold rings are adjusted slightly downward by gold businesses this morning.

SJC Company lists its prices at VND73.3 million ($2,885) per tael for buying and VND 74.9 million ($2,948) per tael for selling, a decrease of VND 150,000 in both buying and selling prices compared to the close of business yesterday afternoon. PNJ Co. also reduces its prices by VND100,000 in both buying and selling directions, trading at VND 73.3 million per tael for buying and VND 75.1 million ($2.955) per tael for selling.

On the global gold market, spot gold prices on the Kitco exchange at 5-6 a.m. (Vietnam time) were at $2,330.2 per ounce, up $4 per ounce from the closing price in New York the previous night. This price, when converted, is equivalent to VND71.5 million per tael, lower than SJC gold by about VND7.4 million per tael and lower than 9999 gold rings by VND3.4 million per tael.

Director Dao Xuan Tuan of the SBV's Foreign Exchange Management Department stated that the gold selling prices of the Big-4 and SJC are likely to continue to decrease in the coming period. The goal of the direct gold sales plan to the public is to narrow and control the difference between the domestic SJC gold bar selling price and the international one to an appropriate level.

In an effort to stabilize the gold market, the HCMC People's Committee has issued an official dispatch instructing the Department of Finance, the Department of Planning and Investment, the SBV – HCMC Branch, and SJC to ensure the supply of SJC gold bars to the SBV.

In related news, a gold jewelry company in An Giang Province was fined VND350 million ($13,770) for violating the law.

According to Head Pham Thi Minh Phuong of the E-commerce Team at the Market Surveillance Agency (Ministry of Industry and Trade), the Market Surveillance Agency has been submitted a decision to impose an administrative penalty of VND350 million on Kim Huong Dinh Gold and Gemstone Co., Ltd. (located at 39 Nguyen Hue Street in My Long Ward of Long Xuyen City in An Giang Province).

The reason for the penalty is that during an inspection, the company was found to be selling 64 gold-colored metal products (including rings, earrings, pendants, bracelets, and bangles) of unknown origin (total value of over VND801 million or $31,515) and 135 products (rings, earrings, pendants, bracelets, and bangles) with signs of infringing on industrial property rights (total value of nearly VND200 million or $7,870).

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