This shift could effectively curb the persistent issue of black market transactions, where buyers often pay a significant premium.

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Photo: Minh Hien

Recently, the difficulties in purchasing gold have driven many consumers to the black market.

At the end of July, Ms. Nguyen Thi Loan from Vinh Phuc province needed to purchase five taels of SJC gold bars to settle a debt. Despite numerous attempts to order online, she could only secure one tael after several days of effort, with a waiting period of three months for the second. To buy the total amount, she would have to wait an entire year.

Fearing a significant increase in gold prices, Loan turned to the black market in early August, paying a premium of 3 million VND ($120) per tael above the official rates listed by banks.

"My work schedule is hectic, and registering to buy gold online is challenging due to frequent errors, so I had no choice but to purchase from outside sources at a higher price," Loan explained.

In recent months, many individuals seeking SJC gold bars or gold rings have faced similar difficulties. Banks have been releasing limited quantities, and most businesses have reported shortages of both gold bars and rings. A few shops have indicated that customers may have to wait 10-15 days to purchase gold rings.

Contrary to these shortages, the black market for gold bars and rings has been bustling, with prices fluctuating between 1 and 5 million VND per tael depending on the type and time of purchase. Social media groups have even emerged, offering registration slots for purchasing gold online from four banks, with prices set at 300,000 VND per slot.

Economist Dinh Trong Thinh recalled that in the past, his family also held many rare Kim Thanh gold bars. When in need of money, he had to secretly sell them, and buying this type of gold was even more challenging.

"Today's market situation resembles the 'subsidy era'," Thinh commented. "Four commercial banks sell limited quantities, while gold shops report being out of stock. People are forced to turn to the black market."

According to expert Tran Duy Phuong, the State Bank of Vietnam (SBV) has recently made significant strides in managing the gold market. By assigning four commercial banks and the Saigon Jewelry Company Limited (SJC) to sell SJC gold bars, the price gap between domestic and global gold has narrowed from 17-18 million VND to an average of 4-5 million VND per tael. This is a positive development, bringing gold prices to more stable levels this year.

However, despite this progress, businesses continue to list prices for SJC gold bars, but when consumers attempt to purchase them, they are often unavailable. Meanwhile, the quantity of gold sold by banks is limited, with each customer allowed to purchase only one tael and required to wait three months before registering for another.

This situation has led to increased anxiety among those seeking to buy gold, prompting them to turn to the black market out of fear of rising prices. In June, the price difference between SJC gold bars on the black market and those listed by banks was as high as 4-5 million VND per tael. By July and August, this gap had narrowed to around 1 million VND per tael, Phuong noted.

Allowing the market to operate freely

 

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Photo: Hoai Bac

To address this issue, expert Tran Duy Phuong suggests that the SBV should not continue its administrative intervention in the gold market. It is time to let the market operate according to its own rules, with the SBV overseeing and intervening only in case of abnormal market behaviors, as it has done in recent months.

"The possibility of a return to volatile gold prices, as seen in the past, is unlikely," Phuong stated. He explained that from April to August of this year, a substantial amount of SJC gold bars - over 300,000 taels - was introduced to the market, significantly easing the scarcity of SJC gold.

Previously, gold prices surged due to supply shortages. However, in the last 2-3 months, the supply has become more abundant, reducing the likelihood of severe gold shortages, Phuong observed.

Given the current situation, the SBV should consider restoring the gold market mechanism, allowing multiple sellers to compete equally in the market, giving consumers the freedom to purchase gold from various sources.

If the SBV decides to continue its stabilization efforts, Phuong recommends expanding the range of entities allowed to sell gold. Instead of limiting sales to four state-owned commercial banks and SJC, other banks should be permitted to sell gold. These banks could purchase gold from the SBV to meet public demand.

Phuong also emphasized the need to end SJC’s monopoly on gold bars. Allowing other gold brands to compete would give consumers more options and potentially lead to better pricing.

However, while these measures may stabilize the SJC gold bar market, the issue of gold ring shortages still requires addressing the import of raw gold materials.

Phuong pointed out that businesses interested in producing gold rings and jewelry are struggling to source raw materials. To produce gold products for the public, companies need clear documentation for gold materials, but this has been exceedingly difficult to obtain. The limited availability of certified raw gold has, in turn, limited market supply.

For over a decade, Vietnam has not imported raw gold materials. Phuong recommends that the SBV consider allowing imports based on business demand. This could involve granting import quotas to businesses or having the SBV itself import and distribute the raw gold.

Phuong warns that if the issue of raw gold supply is not resolved, black market transactions will continue, exposing consumers to risks due to the unregulated quality of gold.

In addition to these solutions, economist Dinh Trong Thinh suggests that banks and businesses involved in gold sales should be transparent about their transactions with the SBV. Accurate data on market supply and demand will enable the SBV to develop appropriate policies for managing gold sales and imports, ultimately achieving a balanced market.

Tam An